Plunge On Corn Prices May Ease Food Inflation

[sapper756]

Plunge on corn prices may ease food inflation

The price of corn suffered its biggest fall for 15 years on Thursday, prompting speculation that the high cost of food may start to ease.

 

Corn prices fell 10% after a US Department of Agriculture report said that farmers were sowing unexpectedly large amounts of the grain.

 

The price of other crops, including soybeans, also fell on speculation that future stock levels will remain high.

 

Corn prices recently hit a record, helping to fuel inflation worries.

 

The report said farmers in the vast crop regions of Iowa and Minnesota had been planting substantially more grain.

 

Corn futures, which were just under an all-time high of $8 (£5) a bushel at the start of June, finished 9.9% down at $6.29 on Thursday. At one point, the price was down almost 12%.

 

Wheat futures ended 8.8% down, with soybeans 2.1% lower. The falls continued on Friday, with wheat futures down almost 2% in early Asia trading.

 

The Agriculture Department report, which said that far more grain acreage was being planted than expected, came despite recent bad weather in the US mid-west.

 

"There are some big surprises in this report," said Karl Setzer, commodity expert at the MaxYield Cooperative in Iowa.

 

The report said farmers had planted 92.282 million acres with corn this spring, well above an average trade estimate of 90.767 million acres.

 

The increase in planting comes as Russia is expected soon to lift a year-long ban on grain exports.

 

Price delayhttp://news.bbcimg.co.uk/media/images/53795000/jpg/_53795774_corn.jpgCorn futures recently reached a record high of almost $8 a bushel at the start of JuneMore expensive grain has led to food price rises, with everything from meat and cereal to soft drinks costing more in the supermarket.

 

A huge harvest in August is likely to slow food inflation, which was predicted to rise between 3%-4% this year in the US.

 

Analysts say it typically takes about six months for changes in commodity prices to feed into retail food prices.

 

"All of us who perceived tighter [corn] supplies... were proven wrong today," said Jason Ward, an analyst with Northstar Commodity.

 

However, Mr Ward pointed out that the extra acreage had yet to be harvested and could be damaged by further bad weather.

 

 

WILL WE SEE ANY BENEFITS FROM THIS?

 

Edited July 1, 2011 by sapper756

[OLDYELLOW]

the prices on the market may have gone down , but this years crops have suffered in UK due to no rain at beginning of year , will corn merchant reduce there price ????? not by a penny i bet there always quicker to put it up than bring it down I wouldn't be surprised if corn remained at price its at for a very long time , but i do wish like others it comes down in price , buy locally from farms hit the big suppliers in there pocket , then prices would fall

[Guest TAMMY_1]

there is no chance that costs of corn will come down

[Guest strapper]

corn merchants make you believe they are your best m8 but in reality its a business ploy to make you feel at ease to part with your money.

 

the last drop in prices werent passed onto the fancier and the farmers/merchants kept the price as it was.

 

just like petrol just went down in my area recently to 132.9 within 2 days it went back to 133.9 and thats where it stayed.

 

if fuel rose in price per barrel today..the price at the pumps would rise tomorrow...but if it went down today then the price at the pumps would stay the same for 3 weeks...reason from the pumps..we bought the fuel at the higher price and we have to wait till that goes.

 

but surely they couldnt have brought in that fuel at the higher price within 24hrs at the pumps of it going up.

 

just like corn..we will be governed by the farmers and merchants because they may seem ok but everyone wants the most of your money.