Corn Jumps to 14-Month High as Unusually Dry Weather May Hurt U.S. Harvest
Corn futures rose to a 14-month high as dry weather damages crops in U.S., the biggest producer and exporter.
Parts of Indiana got less than 5 percent of normal moisture this month, and large areas of Illinois, Ohio, Missouri, Michigan and Kentucky had less than 25 percent of the usual amount of rain, said Allen Motew, a meteorologist at QT Weather in Chicago. Temperatures averaged at least 4 degrees Fahrenheit above normal from Mississippi to Ohio in the past 30 days.
“The hot, dry weather is reducing yield potential,” said Greg Grow, the director of agribusiness for Archer Financial Services Inc. in Chicago. “People are betting that the U.S. yield will be smaller than the government forecast earlier this month.”
Corn futures for December delivery rose 5.5 cents, or 1.3 percent, to close at $4.415 a bushel at 1:15 p.m. on the Chicago Board of Trade. Earlier, the price reached $4.4525, the highest level for a most-active contract since June 15, 2009.
Last week, futures were little changed after jumping 13 percent in the previous four weeks as Russia halted grain exports following the most-severe drought in at least 50 years.
U.S. corn production will reach 13.365 billion bushels, 1.9 percent more than 2009’s record crop, the U.S. Department of Agriculture said on Aug. 12. The government is schedule to update its crop forecasts on Sept. 10.
Early reports indicate “disappointing” yields in the Midwest, Darrel Good, an agricultural economist at the University of Illinois, said in a report today. “It is a little dangerous to base expectations on early results because the driest areas tend to be harvested first,” Good said.
“With year-ending stocks already projected to be less than 10 percent of projected consumption, a lower average yield would point to very tight” supplies, Good said.
Corn is the biggest U.S. crop, valued at $48.6 billion in 2009, government data show.
To contact the reporter on this story: Jeff Wilson in Chicago at jwilson29@bloomberg.net
Rate this Page