Friday, August 10, 2012

Corn report lays out the future direction for the economy

With the ongoing drought across the globe, and especially in America, corn production and yields are quickly becoming one of the most vital data indicators in the economy.  On Aug 10, the USDA issued its projected corn harvest for 2012, and the results were a 17% drop in yields, and a dire outlook for several industries and communities that rely upon the farm staple.





The U.S. Department of Agriculture Friday slashed its forecast for corn production this year by about 17% as drought conditions in key growing regions worsened.
Farmers are now expected to produce just 10.779 billion bushels of corn this year, the USDA said in its monthly World Agricultural Supply and Demand Estimates report. That's a sharp drop from the 12.97 billion bushels the agency predicted a month ago and the reduction exceeded expectations from some traders and analysts.

The new forecast puts U.S. corn production at its lowest since 2006, the USDA said. - Marketwatch
For farmers, investors, futures traders, and ethonol producers, this chart is of vast importance today, in the coming day.



At the end of June, corn futures were selling for 657 a contract.  Today, corn futures reached an inter-day high of 827 per contract, an increase in price of 26% in less than a month and a half.  Projections could raise corn prices to between $10 and $11 per bushel, which would create a price in inflation in food and ethonol to record highs.

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