While the drop in corn prices is helping companies that depend on grain for animal feed, it could lead to higher prices in grocery stores, Newman and Dreibus write. It also "is expected to cut sharply into overall incomes in the U.S. Farm Belt because corn is the country's largest crop, grown on 350,000 farms and yielding about $60 billion in farmers' revenue last year. Now 57 percent off its record high in 2012, corn is trading well below the $4-a-bushel threshold generally required for farmers to earn profits. That means many growers this year likely will fail to cover their costs for the first time since 2006, according to agricultural economists."
Analysts say that corn and soybean prices could rebound somewhat if dry weather hits the Midwest late in the growing season, Newman and Dreibus write. "But if favorable weather continues, corn futures could fall to $3.25 a bushel, estimates Mark Schultz, an analyst with brokerage Northstar Commodity in Minneapolis. He told the Journal that if that happens, "This market will be in the doldrums this year and also into next year." (Read more) (WSJ graphic)
report for the Journal. Prices fell 3 percent to 66.05 cents a pound, "the lowest settlement for the most-actively traded contract since Oct. 13, 2009. It was the largest one-day drop since June 18."