Reduced estimates on 2011's corn harvest may drive up food prices

Low U.S. corn harvest could mean produce will carry higher price.
Low U.S. corn harvest could mean produce will carry higher price.
AgWeek reported that corn futures traded low at the outset of this past week. Small gains were achieved by corn by the end of May 4th, while the commodity was negatively affected by under-performing ethanol. May 5th saw low trading for corn throughout, as a result of poor outside markets that included a rising dollar, and corn exports were well below what was forecast.

A sluggish market for corn is expected following the USDA's Export Inspection Report, stated AgWeek. Some corn growing may take place in the Corn Belt's western area due to projected dry weather, helping to meet existing demand. In the Eastern Corn Belt, less-than-average temperatures and greater-than-average rainfall are predicted, providing some assistance for the new crop months.

On Wednesday, the USDA will release its monthly supply-and-demand projections, and is expected to keep their estimate for this year's corn crop at the low level of 675 million bushels. This number is regarded as a minimum to meet demand, noted Dow Jones Newswires.

With low production continuing, farmers may obtain higher prices for their corn crop. Thus, they could invest in used farm equipment like combine harvesters from their local John Deere dealer.