The US dollar isn’t the only thing shrinking these days. After struggling for months to keep margins up in the face of skyrocketing grain prices, Michigan cereal giant Kellogg Co (K:NYSE) has decided not to raise prices (again) for several popular brands.

Midwest floods might not push up corn prices as much as was feared, according to a report released by the US Department of Agriculture on the damage to crops caused by recent Midwest flooding.

According to the report, US farmers will harvest almost 9% less corn this year than last. Offsetting the flood damage is the more than 1 million additional acres of corn planted in March.

Corn futures, which were about $7.60 last week, dropped to about $7.25 yesterday on the Chicago Board of Trade.

Six times a year, the Agora Financial editors converge from all over the world on Baltimore to exchange ideas about the state of the world and what it means for your investments. Much of the discussion yesterday was frankly grim.

There’s more bad news ahead for the U.S. economy as home foreclosures continue to rise. One out of every 483 U.S. households is at some stage of the foreclosure process, and with that many displaced or struggling homeowners, the economic recovery may well take longer than expected.

Last year, China was viewed as the driver behind rising commodities prices.

Now the blame for spiraling food and oil prices is increasingly being laid at the door of Fed Chairman Ben Bernanke for cutting the fed funds rate to 2% and unleashing yet another wave of inflationary surplus liquidity.

The fallout is now being seen as India, China, the Philippines and Indonesia hike their own interest rates to rein in rising prices.

Consumer prices jumped 7.7% last month, down from 8.5% in April, but inflation there remains top of the list of economic concerns.