Corn, wheat prices dip sharply

WASHINGTON -- Corn and wheat prices fell sharply Monday after the government said farmers planted larger crops than expected this year, helping to offset recent losses from widespread Midwest floods.

Analysts cautioned that U.S. grain supplies remain extremely tight due to strong world demand and increased production of corn-based ethanol. The Agriculture Department also said soybean harvests may be hurt by wet weather.

Overall, the report did little to dispel the threat of higher consumer food prices ahead. Retail food prices rose 4.9% during 2007 and have jumped at a 6.2% annual rate in the past three months. Corn and soybean prices are nearly double the level of last summer, and wheat prices have also soared.

The report temporarily dampened corn prices, with the July contract falling 30 cents -- the maximum allowed -- to $7.25 a bushel on the Chicago Board of Trade.

"We may have survived ...