In a moment of optimism, the U.S. Agriculture department predicted that corn and soybean reserves are higher than the initial estimate. This means that concerns over skyrocketing food prices may be mitigated. The U.S. government underestimated corn reserves by about 500,000 tons and soybean reserves by about 100,000 tons. Corn and soybean prices both dropped in response to the new numbers. Much of the fear over food prices has been connected to perceived low levels of reserves.
Although food prices are still estimated to rise around 3% this year, the new USDA data gives a glimmer of hope for stable prices. To read more about corn and soybean reserves, click here. For more information about food price increases, click here.