Crops are doing so well that on Monday the Agriculture Department lowered its projected prices for wheat by 15 cents a bushel from a month ago and for corn and soybeans by 5 cents. Soybean prices will be the lowest they've been since the early 1970s. A pound of bread cost 14 cents in 1950. The slump in commodity prices is expected to have little impact on consumers because raw commodities generally account for only a fraction of the price of food. For example, farmers receive 7 cents of each dollar consumers spend on baked goods and cereal.
Analysts expect commodity prices to drop further, especially if the weather remains good.
U.S. Commodities Inc. Corn prices could drop another 20 cents a bushel as the growing season progresses, he said. The normal seasonal pattern would indicate we would get some more declines. An ugly business' Farmers are getting a record 47 bushels per acre despite heavy rainfall last month that delayed the harvest in Kansas, the heart of winter wheat production. Production is also up in Europe, China and Australia, more than offsetting declines in other wheat-growing countries. Good weather in the Midwest led USDA to raise its forecast of corn production to 9.7 billion bushels, up from last month's projection of 9.4 billion bushels.