The U.S Department of Agriculture will update its estimates of the nation's corn, soybeans and wheat stockpiles this week – and the data will probably show that inventories of corn have dropped to the lowest levels since 2004.
Increased international sales and soaring prices have made this year a stunningly profitable one for U.S. farmers, particularly those who secured export contracts affected by Russia's embargo on the export of grain.
On Friday, corn prices hit the highest prices the commodity has seen in nearly two years, and Informa Economics, a Tennessee agricultural consultancy, projects that this year's corn harvest will yield almost 4 percent less than last year's.
"The U.S. was supposed to be this 'island of supply,'" Dan Basse, the president of agricultural research firm AgResource Co., told the Wall Street Journal. "We're now starting to question that."
If the U.S. supply falls short of expectations, American farmers could struggle to meet both domestic and international demand; the result could be further increases in the price of grain and social unrest in the developing world.
On the Chicago Board of Trade, corn futures for December delivery rose 0.2 cents to $4.646 per bushel. Wheat futures for December delivery dropped, however, slipping 6.6 cents to $7.344 per bushel.
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