CORN climbed to a record near US$8 a bushel yesterday as floods damaged crops in the United States, the largest producer and exporter, threatening global food supplies.
Soybeans rose to a three-month high. The flooding may be the worst in the Midwest since 1993 and will probably cause "hundreds of millions of dollars" of damage, according to the National Weather Service.
US corn stockpiles may fall 53 percent to a 13-year low before next year's harvest, the US Department of Agriculture said last week.
Record crude oil, wheat, rice and soybean prices this year have exacerbated inflation, forcing governments to increase interest rates as the economy slows and raising costs at Nestle SA and Kraft Foods Inc, the world's largest food companies.
Food and fuel costs have eclipsed the credit squeeze as the greatest threat to the world economy, the Group of Eight nations said.
Stoked by food and fuel prices, "inflation pressures are building around the world," David Cohen, director of Asian economic forecasting at Action Economics in Singapore, told Bloomberg News. That's "squeezing household budgets, especially the poorest, and company profits."
Corn gained as much as 3.5 percent to US$7.9150 a bushel in Chicago and has advanced 33 percent in the past two weeks. It's up 85 percent in the past year on record demand for biofuels and livestock feed as rising Asian incomes increase meat consumption globally.