Corn has become too expensive for some overseas buyers, leading to a drop in demand that could ease the country’s tight supply and bring food prices down later this year. The Agriculture Department estimates that U.S. corn exports are going to drop by about 50 million bushels this summer. That would help boost the year-end corn surplus to 730 million bushels in late August, when the harvest begins—an 8% increase from the previous estimate. An even larger corn crop is being planting now. The government projects the supply will grow to 900 million bushels by late 2012.
That’s likely to ease supply concerns and push global prices lower. Corn prices have more than doubled since last summer and closed Tuesday at $7.07 a bushel. That price is not quite 10% lower than the all-time high of $7.76 reached on April 11. The price has risen as growing demand from ethanol producers and overseas consumers has outstripped supplies. As corn became more expensive, it pulled wheat and soybean prices higher, too. That’s partly because farmers planted less acreage of those crops and focused on planting corn to cash in on the high prices.
