Hello, I'm Mark Pearson. Just as U.S. motorists take to the highway for the 4th of July holiday, the price of oil rolled past a somber milestone. But even with higher energy costs, U.S. consumers continue to open their wallets --
**Crude oil prices closed above 70.00 per barrel Friday for the first time since last summer.
**But the Commerce Department reports consumer spending increased for the second consecutive month. At the same time the Consumer Research Board reports **consumer confidence fell to its lowest point in almost a year. While Americans remain guarded about short-term prospects, **personal income rebounded in May growing almost four tenths of one percent.
**Increased consumer spending promoted the Federal Reserve to continue its year-long trend of leaving interest rates alone. During the previous two years, the Fed raised interest rates 17 consecutive times hoping to keep inflation at bay. But the door is still open as board members say they are on "inflation watch."
But the biggest report out this week for those who live and work in farm country was USDA's June Acreage Report. The market was already playing with the best guess last week but there was still a surprise or two hiding in the details.
USDA's latest acreage report was a surprise to traders who were expecting only a slight increase in the number of acres planted in corn. The latest government estimate of close to 92.9 million acres is nearly a 2-and-a-half million-acre increase over the agencies March guesstimate of 90.45 acres. The number of acres in corn is the highest since 1944 and 19 percent over last year.
The increase in corn came at the expense of soybeans. The number of acres in beans is estimated at 64.1 million acres which is 3 million acres less than the spring estimate. The figure is down 15 percent from last year's record high and the fewest acres since 1995.
Despite a late freeze that caused corn to replace damaged wheat, the report indicates a slight increase over the March estimate of acres planted. USDA says 60.5 million acres are planted in wheat, which is higher than the over 57 million acres planted a year ago, yields however are expected to be down.
The total number of acres planted in principal crops increased by almost 5 million acres over the 315.8 million acres planted a year ago. The new acres are believed to have come from marginal land that had been seeded in alternative crops or were acres in conservation programs that had been held out of production.
The latest USDA figures will be discussed in more depth in the upcoming market segment.