The primary factor affecting the price of the crops seemed to be unusually intense rainfall across the Midwest, which disrupted both planting and harvests “from Iowa through Texas.”
The National Weather Service data show that the rain fell with particular intensity across Oklahoma and northern Texas. Wheat is Oklahoma’s most important cash crop, sowed across six million acres of land each year according to Oklahoma State University.
Wheat futures for September delivery rose 2.4 percent, while corn futures rose 1.1 percent, probably driven by the U.S. Department of Agriculture’s announcement that ethanol producers and Chinese importers are consuming more corn than expected.
The use of corn in ethanol production has persistently generated controversy around the world. Many blame the biofuel industry for causing the sharp increase in food prices in 2007-2008, which led to riots and economic instability in a wide variety of countries from Egypt to Brazil.
In 2008, The Guardian reported on a confidential World Bank study which said that demand for biofuel made from corn and other staples was responsible for 75 percent of the increase in food prices.
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