Corn prices surge to record high

Corn prices have hit new highs after the US Department of Agriculture forecast that output would fall because of poor weather.

Corn hit a record price of $6.672 a bushel for July delivery on the Chicago Board of Trade after the government cut its forecasts for the 2008 yield by 3%.

Crops have been hard hit by wet weather and flooding in the US.

To exacerbate the problem, demand for corn for both food and fuel has been increasing worldwide.

Joe Victor, an analyst with Allendale said: "The biggest surprise is how aggressive the US Department of Agriculture was in dropping yield."