Aug 18, 2022 - Economy

Grain prices keep falling, despite drought

Data: FactSet; Chart: Axios Visuals

Grain prices keep dropping, even though more than half of the Lower 48 states remain in a drought. That's good news for inflation.

Why it matters: If sustained, the decline in wheat, corn and soybean prices could ease the rise in food costs and help policymakers knock inflation down a bit.

Driving the news: Over the last three months, prices for wheat, corn and soybeans are down about 35%, 25% and 17%, respectively.

  • That's a remarkable turnaround from the soaring prices seen earlier this year.

What's happening: a few things.

Yes, but: The U.S. drought still matters, especially to farmers in the deep South and West.

What we're watching: The weather, with few signs of relief on the horizon.

  • The government's excellent drought.gov forecasts page says "most of the Lower 48 should be drier than normal" in the coming days.
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