The US government has again cut its forecast for corn yields as the impact of the worst drought in the country for 50 years becomes clearer.

Washington said the US corn yield is set to be the lowest since 1995-96, sending futures to a record high in Chicago on Friday.

The US also cut its forecast for soybean production and the revised predictions have pushed up wheat prices.

All the signs point to another year of raw material pressure for food manufacturers. The industry would have been hoping for some respite from the pricing pressure of 2011 but there seems little prospect of that.