Corn pushed into new high ground on Friday, with the December contract reaching $7.68 per bushel. Corn rose this week as analysts released predictions for a diminished crop. Most notably, expectations for Iowa's corn yield were slashed from the recent USDA estimate of 177 bushels per acre to a shockingly low 164.6 bushels per acre - a 7 percent decrease in crop size. Iowa is the largest corn-producing state, harvesting nearly 20 percent of U.S. corn in recent years.
Nationwide, analysts are expecting yields less than 150 bushels per acre, well below the USDA estimate of 153 bushels per acre. If this year's crop is smaller than the USDA expectations, the United States could end up with a record low supply of corn. Since last summer, corn prices have more than doubled. Harvests have failed to meet increased demand from foreign nations like China, Japan and Mexico, as well as domestic demand for livestock feed and ethanol production.
Soybeans and wheat rose along with the corn on Friday morning, with November soybeans trading near $14.25 per bushel and December wheat worth over $8.00 per bushel.
A growing percentage of investors are voicing concern about a looming worldwide food crisis. The most poignant evidence are the recent riots in the Middle East, many of which have been linked to food shortages.
Bad Dream for Gold Bugs?
Gold staged a massive about-face this week, bewildering market participants. After making a new record high on Tuesday morning at $1915 per ounce, gold collapsed over $200 in just two days to $1715. This massive volatility was not prompted by any headline news story, but rather profit-taking and panic.
From high to low, gold moved $213 per ounce during the week, the second-largest move on record. By midday Friday, the market had recovered to $1800 per ounce, erasing half of the sell-off, prompting some gold bulls to hope that the drop was just a bad dream.