More good news on the economic front to go along with Wednesday's announcement that non-transportation April U.S. durable goods orders rose on strong exports: rice future dropped to a two month low on increased global supplies, Bloomberg News reported.

July rice traded as low as $18.52 per 100 pound bag, down about 5.5% and at its lowest level since March 24, 2008. Rice has now declined about 26% since its record high in April 2008.

Wednesday's downward catalyst? Improving rice planting conditions in Asia and the United States, along with falling wheat prices in the U.S. Rice is a staple for about 50% of the world's population. The U.S. Department of Agriculture announced Tuesday that 72% of the U.S. rice crop was in good or excellent condition, up from 65% a week earlier. Further, wheat also fell to as low as $7.40 per bushel, which is 45% lower than the February 2008 record of $13.50 per bushel.

Shortages not likely

Economist Glen Langan, whose specializations include agricultural economics, told BloggingStocks Wednesday the food supply data points do not negate the two macro trends driving grain commodities higher -- rising developing world food demand from expanding middle classes and institutional investors chasing outsized equity returns -- but they do suggest one battle is being won: the battle over shortages.

"Higher prices in Asia are doing what we would expect, bring more rice and grain commodities to market, and provided this continues, the frenzy we've seen with regard to rice, if not the long-term price growth, will have been eliminated," Langan said.

Further, Langan said an adequate to above-average wheat crop in the United States would also help lower rice and related grain prices, in much the same way oil and natural gas move in tandem. "In many instances, the major grains, like the major energy forms, are seen as near-parallel substitutes. One can be subbed for the other, if the price justifies it," he said.

Longer-term, new seeds, and more weather tolerant and disease resistant crops will also help to slow the growth in grain and food prices, but Langan cautioned that the U.S. and other industrialized nations face two to three years of double-digit food price increases before supply factors slow these increases.