While deflationary trends may be a bit of a shock to urban-based sectors of the economy, it is practically the norm in Rural America, where commodity production remains a core component of the economy. And better than expected crop yields are likely to keep any commodity-based inflation well in check.
The pick up of the harvest pace pressured markets. Market activity was also muted as much of the trade stayed on the sidelines prior to the Friday morning release of the USDA's monthly crop projections.
The government pegs the 2001 corn crop at 9.55 billion bushels, one percentage point higher than last month's guess. It projects 2.92 billion of soybeans will be produced, also a point higher than last month's guess. And the government estimates 20.2 million bales of cotton will be produced this year, one percent higher than last month's projection.
Responding to the report, grain and oilseed futures markets opened lower.