Flooding in the Midwest and fears of crop damage caused corn prices to climb in Chicago for the eighth consecutive day — their biggest gain in 11 weeks. Prices are expected to hit $8 a bushel by next week.

“Corn is in trouble because of the wet spring that has drenched the midwest,” says Justice Litle in Taipan Daily.

Yesterday, the USDA said in a report that American corn output will be down significantly from last year’s estimate.

Wheat sank to its lowest price since August last year as US farmers began harvesting what is expected to be the biggest winter grain crop in a decade, reports Bloomberg:

Production will increase 17 percent from a year earlier to 1.78 billion bushels, the most since 1998, the U.S. Department of Agriculture forecasts. About 4 percent more acres were seeded from September to November, the agency said. Wheat prices have tumbled 45 percent from a record $13.495 a bushel on Feb. 27.

A month ago, I wrote an article here in the A-Letter detailing the global food crisis. According to data from the World Bank, global food prices have soared 83% in the past three years alone.

A perfect storm is gathering that may make investing in a livestock ETF one of the best profit plays for 2008.

According to a report by Bloomberg, cattle prices may rise 13% by the end of the year on the Chicago Mercantile Exchange and Brazil’s Bolsa de Mercadorias e Futuros. More from this story:

Not since 1996, when corn reached what was then a record $5 a bushel, have cattle been this cheap relative to their primary source of feed.

Agricultural commodities won’t drop back to pre-crisis levels for at least ten years, according to a report by the OECD and the UN. This from the Financial Times:

Food prices have undergone a paradigm shift and will not drop back to pre-crisis levels for at least the next 10 years, putting long-term pressure on governments facing the food crisis, according to a forthcoming report.

The time is right to invest in a livestock ETF. Livestock prices have remained cheap over because grain prices have remained low. But this has changed… and an ETF is a great way to play the upswing in livestock prices.

“Hogs, like most commodities, went nowhere for 30 years,” says Ian Davis in The Growth Stock Wire. “In 1977, hogs sold for about 55.5 cents per pound. Today hogs sell for only about 79 cents per pound. That’s a rise of 42% in 31 years, or an annualized return of 1.1%… well below the inflation rate.

Corn stocks are expected to plunge to a 13-year low, according to the US Department of Agriculture, setting up a great play in a little-known livestock ETF.

MarketWatch reports that corn stocks are set to suffer because US farmers are cutting back corn acreage this spring to grow more soybeans.

Corn futures for July delivery today closed down 1 cent at $6.2925 a bushel. The contract had ended Thursday’s session at $6.3025 a bushel, an all-time high.

The largest freezer in the world is in Le Mars, Iowa. The freezer is six stories high and shaped like a cube. The local newspaper calls it a “high rise freezer.”

OK, I’ve finally found the bright side to corn-based ethanol: The rising price of corn might drive a stake into the heart of a major cause of obesity in the United States.

Globally, corn supplies are already straining to meet demand. America is the world’s king of corn. If our crop is going to be light, that puts corn on the launch pad.