(NASDAQ) – Grain and soybean prices surged Wednesday amid renewed concerns that hot, dry weather in the offing could threaten U.S. crops.
Corn prices touched a two-week high as weather forecasts call for high temperatures and diminished rainfall toward the end of July, which could hit parts of the Midwest during the corn’s critical pollination and kernel-filling phases. While federal data shows the U.S. corn crop is in tip-top shape so far, temperatures in the western Corn Belt are slated to reach 100 degrees Fahrenheit next week and the northeastern quarter of the Corn Belt also is expected to see heat and dryness in coming weeks.
“Grains continued Tuesday’s post-report rally on Wednesday as forecasts for very hot temps in late July called USDA’s forecasts for trendline corn and soybean yields into question,” said Dave Marshall, farm-marketing adviser at TCFG LLC in Nashville, Ill. in a note to clients. The corn market also posted gains Tuesday after the U.S. Department of Agriculture forecast smaller-than-expected domestic stockpiles of the grain.
Corn futures for delivery in July soared 16 cents, or 4.6%, to $3.65 3/4 a bushel at the Chicago Board of Trade. Most- actively traded December futures advanced to $3.69 3/4 a bushel.
Soybean prices also climbed on the outlook for warm, dry weather, which could dent soybean yields if conditions extend into early August, which is the most critical month for that crop’s development. Prices for the oilseeds also rallied after the USDA on Tuesday showed oilseed inventories this season are tighter than expected, intensifying the impact of any crop shortfalls this year.
CBOT August soybeans, the most actively traded contract, rose 20 1/2 cents, or 1.9%, to $11.22 3/4 a bushel.
Wheat prices gained, buoyed partly by strength in corn and soybean markets. Prices for the grain have risen off a 10- year low posted last week despite government projections that U.S. farmers this season will harvest a huge wheat crop, while domestic grain reserves also swell.
CBOT July wheat added 1 1/4 cents, or 0.3%, to $4.39 3/4 a bushel.
