Hello, I'm Mark Pearson. Faced with soaring fuel prices, U.S. consumers are becoming more cautious about spending in other areas. **The Commerce Department reported Thursday that retail sales dropped two-tenths of one percent in April... their first decline in seven months. **Wall Street reacted bearishly to the report, slicing nearly 150 points off the Dow Jones industrial average. **Just one day earlier the Dow tallied its 21st record high in 2007 after the Federal Reserve opted to leave interest rates unchanged. **Friday's Producer Price Index report supported the Fed's decision. According to the Labor Department, wholesale prices, outside of the volatile food and energy sectors, were unchanged in April. **But, while inflation may be in check, the U.S. appears to be losing ground in the global trading arena. The government reports America's trade deficit soared more than 10 percent in March to $63.9 billion, its highest level in six months. Agriculture, of course, is a highly trade-sensitive industry. And this week's USDA estimates on crop production and ending stocks had producers focusing on the immutable law of supply and demand.
Despite delays in planting due to wet spring weather, USDA is still projecting a corn crop of 12.5 billion bushels up 18 percent from last year. Fields have started to dry out and well over 50 percent of the crop is in the ground.
USDA shows U.S. corn ending stocks for 2006-2007 of 937 million bushels with ethanol expected to consume 27 percent of the nation's corn crop.
Ending stocks for soybeans and wheat are less dramatic and not showing much of a threat of a shortage this year. USDA estimates ending stocks at 610 million bushels for 2006-2007.
This year's soybean crop is projected at 2.7 billion bushels, down 443 million bushels from the record 2005-06 crop.
U.S. ending stocks for wheat are being called neutral -- coming in at 2,174 million bushels. Total wheat production for this year is projected at 2.2 billion bushels, up 20 percent from last year.
In the south, lack of soil moisture concerned cotton farmers, but more than 32 percent of the crop has been planted.