Government numbers continue to confirm what most Americans know, the economy is slowing. Lay-offs, sluggish retail sales and soaring energy prices are siphoning wealth from American households.
Sharply higher gasoline prices pushed wholesale inflation 3-tenths of a percent higher last month. That rise was below most projections. It is expected the federal reserve will again lower interest rates when it meets next week. The hope is cheaper money will push the economy. Lower interest rates are also likely to weaken the dollar. Given their fondness for imports American consumers are likely to be pinched by an unfavorable exchange rate. But export sensitive American agriculture could be helped by a cheaper dollar, and by lower cost operating capital. That scenario, however, is not likely to soon off-set market discouraging fundamentals.
With about 20 percent of the crop planted the government is projecting a massive 3 billion-bushel soybean crop this year. That outlook is largely predicated on the fact farmers, responding to higher government subsidies, are planting more acres to beans this year.
With more than 90 percent of the U.S. corn crop in the ground, the government also sees ample supplies of the feed grain.
Only the wheat pits found positive news in the government outlook.
With the beginning of harvest rapidly approaching, the USDA now projects the winter wheat crop will be 14 percent lower than last year. The production fall off is attributable to drought on the southern plains, and the fact low prices discouraged more plantings.