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Floods drive corn to record high Floods drive corn to record high
(about 4 hours later)
The price of corn has hit a record high over supply worries after severe flooding in the United States' Midwest this month ruined crops.The price of corn has hit a record high over supply worries after severe flooding in the United States' Midwest this month ruined crops.
Corn hit a record price of $8 (£4) a bushel for July delivery on the Chicago Board of Trade.Corn hit a record price of $8 (£4) a bushel for July delivery on the Chicago Board of Trade.
Torrential rains this month caused the worst flooding for more than a decade across the US corn belt that stretches from Ohio to Nebraska.Torrential rains this month caused the worst flooding for more than a decade across the US corn belt that stretches from Ohio to Nebraska.
The US is a key producer and exports 54% of the world's corn.The US is a key producer and exports 54% of the world's corn.
Estimates show three million acres of corn under water Glenn Hollander, trader, Chicago Board of TradeEstimates show three million acres of corn under water Glenn Hollander, trader, Chicago Board of Trade
The government has cut its forecasts for the 2008 yield by 3%.The government has cut its forecasts for the 2008 yield by 3%.
Analysts said millions of acres of the grain had been ruined and next years crop would be been hit too. Analysts said millions of acres of the grain had been ruined and next years crop would be hit too.
"Estimates show three million acres of corn under water and probably two million didn't get planted. So that gets you up to five million, or 700 million bushels," said Glenn Hollander, a Chicago Board of Trade grain merchant."Estimates show three million acres of corn under water and probably two million didn't get planted. So that gets you up to five million, or 700 million bushels," said Glenn Hollander, a Chicago Board of Trade grain merchant.
Food price fearsFood price fears
Corn prices have jumped by a quarter this month alone and are up 90% over the year. The sharp price rise has stoked fears about food price inflation.Corn prices have jumped by a quarter this month alone and are up 90% over the year. The sharp price rise has stoked fears about food price inflation.
Supply worries have been compounded by rising demand. Corn is not only a staple food for humans, it is also the main ingredient in cattle feed.Supply worries have been compounded by rising demand. Corn is not only a staple food for humans, it is also the main ingredient in cattle feed.
Meanwhile, the grain is increasingly being used to make biofuels adding to supply pressures.Meanwhile, the grain is increasingly being used to make biofuels adding to supply pressures.
The International Grains Council estimated that US corn stocks would be 15 million tonnes lower by the end of August 2009, compared with the previous year.The International Grains Council estimated that US corn stocks would be 15 million tonnes lower by the end of August 2009, compared with the previous year.