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T & K Futures and Options Says Get Ready For Major Food Inflation

The most recent WASDE and USDA supply and demand report showed lower supplies for corn, soybeans and wheat. This will bring the fuel versus food debate back as the use of corn for ethanol and soybean oil for biodiesel is pushing food costs higher.Couple this with the idea of less available usable acres for farming and higher fertilizer costs may lead to a global food inflation crisis.

Port St. Lucie, FL (PRWEB) January 26, 2011

The most recent WASDE and USDA supply and demand report showed lower supplies for corn, soybeans and wheat. This will bring the fuel versus food debate back as the use of corn for ethanol and soybean oil for biodiesel is pushing food costs higher.Couple this with the idea of less available usable acres for farming and higher fertilizer costs may lead to a global food inflation crisis.

The most recent WASDE and USDA report showed a corn production drop of 1.5 bushels per acre in yield. This decrease offsets the 2010 acreage increase by 183,000 bushels. The corn carryover dropped to 745 million bushels which is 87 million smaller than the December 2010 report. When the arithmetic is tabulated, corn has a 5.5% stocks-to-usage ratio which is the lowest since the 1995-96 season. This trend is likely to continue and corn futures prices may set new all time highs. Visitto learn more about corn futures and options.

The report also showed U.S. wheat ending stocks for 2010/11 are projected 40 million bushels lower. The expected reduction in feed and residual use is more than offset by higher projected exports. The odd weather that caused record floods in Australia and droughts in Russia is also affecting wheat prices. Visitto learn more about wheat futures and options.

The report showed soybean production down 46 million bushels to 3.329 billion bushels. Lower yields and reduced harvest acreage are two of the causes of this reduction. The use of biodiesel is also using up much of the soy oil supplies which may push soybean futures prices to new all time highs soon. Visitto learn more about soybean futures and options.

The author of this article is a 17 year veteran of the futures and options markets and the president of T & K Futures and Options, Inc. Past performance is not indicative of future results. Futures, options and foreign exchange products carry significant risk of loss.

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MICHAEL SMITHT & K Futures and Options, Inc.800-915-4716Email Information