The United Nations Food and Agriculture Organization (FAO) reported this morning that its global food price index rose to 216 in September, up 1.4% (3 points) from August. The rise is attributed to higher prices for meat, dairy and cereal grains.
The FAO also forecast that world cereal production would decline by 2.6% from the record total posted in 2011 to 2.286 million metric tons. Corn and other coarse grain production is expected to drop by 2.3%, while wheat production is forecast to fall 5.2%. Rice production is expected to be unchanged.
The food price index is more than 9% lower than its peak in February 2011 and 4% lower than it was in September 2011. But the FAO is still concerned that prices will turn back upward in the near future:
While shrinking maize export availabilities and high maize prices have been leading cereal markets in recent months, tightening wheat supplies have also become a concern. Nonetheless, international wheat prices fell towards the second half of the month, following the announcement by the Russian Federation that it would not impose restrictions on exports.
The Teucrium Corn Fund (NYSEMKT: CORN) closed down 0.1% last night at $42.29 in a 52-week range of $35.24 to $52.69. The Teucrium Soybean Fund (NYSEMKT: SOYB) closed up 0.25% last night at $25.80 in a 52-week range of $20.42 to $28.85. Neither fund is heavily traded.
Paul Ausick
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