(Businessweek) – Corn futures rose to the highest in more than a week and soybeans rallied on speculation that the worst U.S. drought since 1956 will cause more crop damage than the government forecast. Wheat also rallied.
Production of corn in the U.S., the world’s largest grower and exporter, may be less than the 273.8 million metric tons forecast by the U.S. Department of Agriculture on Aug. 10, and soybean output may slip below the 73.3 million tons predicted by the agency, said Jamey Kohake, a broker at Paragon Investments. Participants in the annual Professional Farmers of America tour began a seven-state tour of Midwest fields today.
“There’s speculation about lower yields,” Kohake said by telephone from Silver Lake, Kansas. “The corn harvest yields are pretty pathetic.”
Corn futures for December delivery jumped 2 percent to settle at $8.2375 a bushel at 2 p.m. on the Chicago Board of Trade, after reaching $8.25, the highest for a most-active contract since rallying to a record $8.49 on Aug. 10. The price has jumped 63 percent since mid-June because of the drought.
Soybean futures for November delivery rose 2.3 percent to $16.835 a bushel in Chicago. The price has gained 28 percent since June 15. Soybean meal, used to feed livestock, jumped 2.6 percent to $512.80 per 2,000 pounds, after reaching a record $513.50 today.
Wheat futures for December delivery advanced 0.9 percent to $9.0275 a bushel on the CBOT. The price had increased for four straight sessions.
Corn is the biggest U.S. crop, valued at $76.5 billion in 2011, followed by soybeans, hay and wheat, government figures show.
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