Corn price plunges as US acreage rises

Corn futures have suffered their steepest fall in 15 years after record prices prompted US farmers to defy wet spring weather to plant a sharply increased acreage of the grain.

The decline in the corn (maize) price – if it persists – could help support the Federal Reserve’s view that the recently seen higher US inflation could be transitory.

Lower food prices could also bode well for the US economic outlook. In its June statement, the Federal Open Market Committee, which sets interest rates, cited “higher food prices” and their damping effect on consumer spending as one of the conditions restraining the economy. The US is the largest corn producer and exporter.

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