Corn prices fell sharply yesterday on news that US farmers had planted near record quantities of the staple.
The US Department of Agriculture also reported higher stock levels, and Goldman Sachs slashed its forecast for corn and wheat prices by 26 per cent. Corn and wheat will be at $5.90 a bushel in three months, down from estimates of $8, according to Goldman Sachs analysts. Corn futures in Chicago fell by their largest margin since last November, down 30 cents – the maximum price change allowed by futures exchanges – to about $6.21 a bushel. It now stands at a three-month low. Corn hit a high of $7.99 a bushel in June.
The USDA said yesterday that America's farmers planted 92.3 million acres of corn this year, the second-highest figure since 1944. Much of this has been at the expense of soya. Stockpiles stand at 3.7 billion bushels, 12 per cent higher than forecasts.
Recent record harvests in southern Africa have also helped calm fears about further jumps in food prices, at least in the short to medium term. Lower corn costs will help livestock farmers faced with high feed prices, and generally ease one of the main drivers of global inflation.
The easing in food price inflation will reduce the pressure on household budgets in the world's poorest nations, something that has helped trigger unrest in the Middle East and North Africa.
Corn prices are up 74 per cent over the past year , wheat by 69 per cent, soya beans by 36 per cent and sugar by 21 per cent.