USDA: Corn supplies jump, easing concerns

Associated Press

ST. LOUIS

A larger corn crop is easing concerns of a grain shortage and could slow food inflation later this year.

The U.S. Agriculture Department estimated Tuesday that 880 million bushels of corn will be left over when the harvest begins in the fall. That’s an increase from the previous estimate of 730 million bushels.

Corn prices rose about 9 cents to $6.42 a bushel in morning trading because the projected supply increase wasn’t quite as big as analysts had forecast. Still, prices are about 20 percent lower than the record $7.99 a bushel they hit in early June.

Higher corn prices led farmers to plant the second-biggest corn crop this year since World War II. The surprisingly big crop helped offset growing demand from the U.S. ethanol industry and overseas livestock producers.

A bigger crop doesn’t guarantee lower food prices. A drought or flood could limit the size of the harvested crop. Many of the acres planted this spring were on marginal land that won’t yield much grain. Many farmers planted during wet weather just because they knew they could get the crops insured.