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Ag Story

Below is a story from the Associated Press this morning on the Ag Industry. If you don’t have Ag exposure in your portfolio, you are missing out on the biggest trend since the energy and metals trends began a few years ago.

WASHINGTON (AP) – Commodity traders will look to a government report on agricultural products Thursday to gauge the impact of June’s inclement weather on U.S. crop prices.

The Department of Agriculture is scheduled to release its June agricultural prices report at 3 p.m. EDT. The report measures the average prices received by farmers for crops including corn, soy beans and potatoes as well as livestock and poultry. The prices are usually slightly lower than actual market prices.

Unexpectedly harsh weather in the past month led to great volatility in pricing for both wheat and corn. Heavy rains in the Midwest sent wheat prices soaring to a 10-year high of more than $6 a bushel in mid-June. Prices were also affected by unusually dry conditions in the wheat-producing Black Sea region, where the Ukraine halted exports of the crop.

Meanwhile corn farmers in the Eastern U.S. continued to experience dry conditions, keeping prices above $4 a bushel.

For May the government reported the average price of corn at $3.48 per bushel, up more than 60 percent from $2.17 last year. The average price received for wheat was $4.70, 15 percent above $4.09 in May 2006.

Farmers have watched corn prices steadily rise as ethanol producers such as Illinois-based Archer Daniels Midland Co. and Pacific Ethanol drive demand for corn. More than 100 ethanol plants have sprung up across the country as investments in alternative fuel increase, according to the Renewable Fuels Association, a trade group for ethanol producers.

Greater demand for corn also has driven up prices for other commodities as farmers dedicate fewer acres to crops such as beans and grain. The Department of Agriculture on Friday is scheduled to release a report estimating how many acres of corn farmers will plant for the coming season.