There were still more signs this week of economic expansion, though a consensus on just where the economy is headed remains elusive.
Productivity at U.S. companies in the second quarter of the year posted the biggest gain in more than a year. But that's because businesses are producing more with fewer workers. New claims for unemployment benefits climbed last week to their highest level since mid-July. Still, back-to-school merchandise pushed August sales above expectations at some of the nation's biggest retailers.
In the country, expectations are headed in the opposite direction. The mid-summer prospect of a bumper harvest has diminished as heat and a lack of rain cripple crop ratings and yield potential.
Iowa, Minnesota, Wisconsin, Missouri, and northwestern Illinios all reported rainfall totals of half an inch or less during the month of August. Rain did come to some areas over the holiday weekend, but in most cases the amount was not enough to make a difference.
The arid conditions are leading to revisions in production estimates and some analysts are now predicting the 2003 US corn crop will be less than 10 billion bushels.
According to the Agriculture Department's weekly report, 46 percent of the nation's corn crop is in good to excellent condition, down 14 percentage points from the previous week. Forty-five percent of the soybeans are rated in the good to excellent range, down 3 percentage points from last week.
Declining crop conditions coupled with strong demand for grain and oilseeds is leading to higher prices.
According to the Energy Information Administration, the US ethanol industry produced a record 178,000 barrels per day in July, up nearly 40 percent last year.
The September Corn futures contract continued its month-long trend upward this week, while September Beans broke through the six-dollar barrier and flirted with contract highs.