Another article (subscription may be required) about worldwide food price and availability concerns:
Prices of corn and soybeans leapt 4% Wednesday and wheat gained 1%, continuing the broad rally in commodity prices that began in June. With yesterday’s gains, prices of corn futures contracts are now up 94% from their June lows; soybeans are up 51% and wheat is up 80%.
The USDA’s revisions reflect the impact of dry weather in South America and floods in Australia, which have compounded supply constraints that first started to emerge in the middle of last year, when a drought in Russia ravaged that country’s wheat fields. The agency also cut estimates for U.S. harvests of corn and soybeans.
|Harvesting wheat in northern Kansas, 2010
This week’s extreme cold in the winter wheat belt was not taken into account in the reduced USDA estimates. Given the lack of snow cover in parts of Oklahoma, winterkill is a possibility which would further shrink supplies. We won’t know for several weeks (the crop is dormant now) whether this occurred.
I continue to be concerned about trends worldwide food supplies and will keep our blog readers updated.