Due to the jump in grain prices for CORN (quote) and soybeans (SOYB, quote) from the drought in the Midwest farm belt of the United States, the United Nations Food and Agriculture Organization’s food price index rose 6% in July, the steepest spike in nearly three years.
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When the U.S. Department of Agriculture releases its most recent corn crop estimate in its World Agricultural Supply and Demand Estimates (WASDE) report, the results are not expected to be pleasing for those who must buy grain crops.
The exchange-traded funds for corn, Teucrium Corn (CORN, quote), and soybeans, Tecucrium Soybean (SOYB, quote), are both trading near year highs due to the drought in the Midwest farm belt of the United States. As the United States produces about 40% of the world’s corn, this has driven the price upward to record levels.
Talking about shifting planting patterns and China’s hunger for corn is all well and good, but in an environment where the U.S. dollar is riding high, just about all major commodity markets are feeling the pressure. Food is not immune.