Page last updated at 20:19 GMT, Monday, 16 June 2008 21:19 UK

Floods drive corn to record high

Corn field flooded in the US after bad weather
Severe flooding in America corn belt has pushed up prices

The price of corn has hit a record high over supply worries after severe flooding in the United States' Midwest this month ruined crops.

Corn hit a record price of $8 (4) a bushel for July delivery on the Chicago Board of Trade.

Torrential rains this month caused the worst flooding for more than a decade across the US corn belt that stretches from Ohio to Nebraska.

The US is a key producer and exports 54% of the world's corn.

Estimates show three million acres of corn under water
Glenn Hollander, trader, Chicago Board of Trade

The government has cut its forecasts for the 2008 yield by 3%.

Analysts said millions of acres of the grain had been ruined and next years crop would be hit too.

"Estimates show three million acres of corn under water and probably two million didn't get planted. So that gets you up to five million, or 700 million bushels," said Glenn Hollander, a Chicago Board of Trade grain merchant.

Food price fears

Corn prices have jumped by a quarter this month alone and are up 90% over the year. The sharp price rise has stoked fears about food price inflation.

Supply worries have been compounded by rising demand. Corn is not only a staple food for humans, it is also the main ingredient in cattle feed.

Meanwhile, the grain is increasingly being used to make biofuels adding to supply pressures.

The International Grains Council estimated that US corn stocks would be 15 million tonnes lower by the end of August 2009, compared with the previous year.


RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites


FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

BBC navigation

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.

Americas Africa Europe Middle East South Asia Asia Pacific