The searing temperatures that have blanked the U.S. during the summer are causing crop yields to fall, driving commodity futures precipitously higher.
According to a report from Bloomberg, corn, soybean and wheat futures all jumped in trading on Thursday. The rise in food costs is fueled by lowered crop forecasts in the U.S., which is the world's biggest exporter of a number of food staples, including wheat, soybeans and corn.
The U.S. Department of Agriculture (USDA) said this week that it had reduced its corn crop estimate by 4.1 percent after hot temperatures in the Midwest had adversely affected crop yields. Further, the USDA similarly reduced its soybean forecast by 5.2 percent, and officials said analysts had downwardly revised spring wheat production forecast by 5.2 percent.
Quickly rising food prices are worrying governments across the globe. High food prices helped to ignite the so-called Arab Spring, which refers to the spate of revolutions in the Middle East and North Africa.
Higher food prices are especially worrisome for developing nations, which are more impacted by price fluctuations than are nations like the U.S. China, on the other hand, which has been driving world growth for the past few years, has experienced significant inflationary pressures over the past year, and the government has taken extraordinary actions as it works to slow its red-hot economic expansion.
Simple supply and demand fundamentals are essentially driving food prices higher, experts say. The seemingly insatiable demand for food and other commodities from Brazil, Russia, India and China has eroded global stockpiles. As a result, the price of many food staples has shot up over the past year.
"Food is needed worldwide, so we’re going to be looking at higher prices," Jefferies Bache senior grain analyst Shawn McCambridge said in an interview this week.
Inclement weather in the U.S. Midwest hurt crop yields throughout the region, Iowa State University agronomists stated in a report released this week.
"Ears did not pollinate well in major parts of fields across the Midwest," the researchers concluded.
On the Chicago Board of Trade on Thursday at 3:20 p.m., corn futures for December delivery jumped 4 percent to trade at $7.15 per bushel. Soybean futures for November delivery were up 2.5 percent, or roughly 32 cents, to trade at $1.332 per bushel. Wheat futures for December delivery climbed 2 percent higher to trade at $7.34 per bushel, according to CNN.
According to a report from Bloomberg, corn, soybean and wheat futures all jumped in trading on Thursday. The rise in food costs is fueled by lowered crop forecasts in the U.S., which is the world's biggest exporter of a number of food staples, including wheat, soybeans and corn.
The U.S. Department of Agriculture (USDA) said this week that it had reduced its corn crop estimate by 4.1 percent after hot temperatures in the Midwest had adversely affected crop yields. Further, the USDA similarly reduced its soybean forecast by 5.2 percent, and officials said analysts had downwardly revised spring wheat production forecast by 5.2 percent.
Quickly rising food prices are worrying governments across the globe. High food prices helped to ignite the so-called Arab Spring, which refers to the spate of revolutions in the Middle East and North Africa.
Higher food prices are especially worrisome for developing nations, which are more impacted by price fluctuations than are nations like the U.S. China, on the other hand, which has been driving world growth for the past few years, has experienced significant inflationary pressures over the past year, and the government has taken extraordinary actions as it works to slow its red-hot economic expansion.
Simple supply and demand fundamentals are essentially driving food prices higher, experts say. The seemingly insatiable demand for food and other commodities from Brazil, Russia, India and China has eroded global stockpiles. As a result, the price of many food staples has shot up over the past year.
"Food is needed worldwide, so we’re going to be looking at higher prices," Jefferies Bache senior grain analyst Shawn McCambridge said in an interview this week.
Inclement weather in the U.S. Midwest hurt crop yields throughout the region, Iowa State University agronomists stated in a report released this week.
"Ears did not pollinate well in major parts of fields across the Midwest," the researchers concluded.
On the Chicago Board of Trade on Thursday at 3:20 p.m., corn futures for December delivery jumped 4 percent to trade at $7.15 per bushel. Soybean futures for November delivery were up 2.5 percent, or roughly 32 cents, to trade at $1.332 per bushel. Wheat futures for December delivery climbed 2 percent higher to trade at $7.34 per bushel, according to CNN.
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