Agricultural products were left affected on Friday after a U.S. government report showed a dip in production and failed to meet the global demand for food and biofuels.
U.S. Department of Agriculture report projected wheat prices for the 2007-2008 season would be about 25 cents higher per bushel than it expected in December. The world soybean harvest will fall 6.5 percent this year while U.S. corn inventories will be 20 percent less than estimated a month.
Wheat for March delivery fell 2 percent this week to close Friday at $9.125 per bushel, affecting all food makers and particularly cereal companies including Kellogg Co. and General Mills Inc. In general, food companies are struggling to deal with higher commodity costs, being forced to raise retail prices as a result.
Soybeans jumped to a record on the Chicago Board of Trade, hitting a high of $13.1025, the highest record in 35 years. Soybean futures for March delivery rose 38.5 cents, or 3.1 percent, to $12.9875 a bushel. Futures gained 78 percent last year, after U.S. farmers planted the fewest acres in 12 years and sowed the most corn since 1944.
World soybean production will fall to 220.34 million metric tons, or 0.6 percent less than originally forecast in December, the USDA said today in a report. While world inventories of the oilseed on September 30 will be 25 percent lower than a year earlier, at 46.24 million tons, the USDA reported.
Kellogg Company shares fell 2.9 percent to $50.89 on the New York Stock Exchange. General Mills, Inc. Dipped 2.08 percent to $56.15.