How do things look at the end of a dark week?

This week everyone watched as the financial crisis caused a massive tumbling of stocks, only to see the market recover on news of a $700 billion bailout by the government to take over the bad debts that started the rapid decline. While the proposal still needs to be passed by Congress, just the news that someone was working on fixing things sent stocks soaring.

Commodities specifically saw a jump. Marketwatch reports:

Corn for December delivery rose 15 cents, or 2.8%, to $5.42 a bushel on the Chicago Board of Trade. It rallied to an intraday high of $5.48 a bushel earlier. Despite the gain, corn ended the week down 3.7%.

Boosting corn prices was the Bush administration's sweeping plan for isolating financial institutions' troubled mortgage-backed assets. Congressional leaders promised quick work toward a legislative solution.

Insiders at Forbes cited potential inflation increases for the gain:

One trader said grains were drawing investors concerned that the government's injection of billions of dollars into the financial markets could lift inflation.

"It's all about inflation today, screaming inflation and it's bullish for all commodities including grains," said Vic Lespinasse, analyst for GrainAnalyst.com.

"The government action is inflationary," he said, adding that the favorable crop weather in the U.S. Midwest grain belt was an otherwise bearish factor for grains.

Not all news has such as bright a silver lining as the bailout plan. The Des Moines Register reports unsettling news about the corn and soybean supply:

Washington, D.C. - The food-vs.-fuel debate isn't going away, even if this year's corn and soybean crops averted disaster.

Assuming the government's latest crop forecast is right and this fall's corn and soybean harvests are sufficient to meet demand, stocks of corn and soybeans are still expected to fall to historically low levels. That's even as biofuel production and global grain consumption are likely to keep growing.

Corn supplies are projected to fall by one-third to just more that 1 billion bushels, or about one month's consumption, when harvest starts next fall. Supplies could be even tighter; many analysts think the latest production forecast is overly optimistic.

Did last week's financial crisis impact your business? Does it impact your future plans? Leave a comment and let us know.

Further Reading:

CNN on The Week that Broke Wall Street

CNN on the bailout proposal

Des Moines Register on how higher food prices can benefit global warming and US waistlines.

Des Moines Register on how a professor is using science to yield bigger corn crops.

The Wall Street Journal on the FDA ruling for genetically altered food labeling.