Morning:
10°c
Corn cost up on new flood fears
Evening Standard 18 Jun 2008
Food companies faced further pricing pressure today as the cost of US corn rose on fears of more flooding in the American Midwest.
July corn futures, which have risen almost 60% this year, gained 1% to more than $7.49 a bushel.
A Mississippi River levee has broken, flooding more cropland in Illinois, and estimates of the number of corn and soy acres that have been lost keep increasing.
The river has now flooded, or is at risk of flooding, a total of 26 levees protecting 285,000 acres of Iowa and Illinois farmland, the US army said today. While the region is currently dry, more rain is forecast for tomorrow.
Food companies, already reeling from months of price rises, were shocked last week by a US Department of Agriculture revision its forecast for corn output, down 3% from last month.
That came before the flooding that has devastated the US heartland.
The rally in corn to record highs has also boosted wheat as expectations grow that animal-feed makers may switch to the grain.
