Corn Jumps as Supplies Ebb, Heightening Food-Inflation Concern

Corn rose the most allowed by the Chicago Board of Trade as concerns mounted that food inflation will accelerate after the latest U.S. government forecasts on supplies and acreage. Soybeans and wheat also jumped.

U.S. corn stockpiles at the beginning of March dropped to 6.52 billion bushels, the lowest for the date since 2007, the Department of Agriculture said today. Last month, the prices of corn, soybean, wheat and rice climbed to the highest since 2008, when surging food costs spurred riots from Haiti to Egypt. Today, cattle rose to a record for a second straight day, and cotton jumped.

“What’s unique about 2011, unlike 2008, is that corn and soybeans are equally tight, cotton is tight and wheat isn’t comfortable either,” said Hussein Allidina, the head of commodity research at Morgan Stanley in New York. “The takeaway is that prices are not high enough to ration demand.”

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- Posted: 2011-03-31 10:24:58

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