Corn Price Soars as Hot Weather Scorches U.S. Crop; Soybeans, Wheat Gain

(Corrects month in eighth paragraph.)

Corn surged the most in three months after a government report showed adverse weather eroded U.S. crop conditions. Soybeans had the biggest gain in almost three weeks, and wheat jumped to an eight-week high.

Last week, corn-crop ratings fell in Iowa, the biggest state grower, along with Illinois, Nebraska, Indiana and Missouri, the Department of Agriculture said in a report yesterday. This July was the hottest since 1955 in the central and eastern U.S. with average temperatures 3 degrees to 7 degrees Fahrenheit higher than normal, MDA Information Systems Inc. said in a report.

“The corn crop has been damaged by the heat last month, and rains will not improve yield potential in August,” Mark Schultz, the chief analyst for Northstar Commodity Investment Co. in Minneapolis, said in a telephone interview.

On the Chicago Board of Trade, corn futures for December delivery jumped by the exchange limit of 30 cents, or 4.4 percent, to close at $7.1575 a bushel at 1:15 p.m., the highest for a most-active contract since June 9. The grain has surged 77 percent in the past year on declining global inventories.

The U.S. is the world’s leading exporter of corn, soybeans and wheat. Prices rallied after Congress passed a measure to raise the debt ceiling, heading off a default and boosting prospects for commodity demand.

‘Along for the Ride’

“Corn took off, and then the other grains came along for the ride,” Tomm Pfitzenmaier, a partner at Summit Commodity Brokerage in Des Moines, Iowa, said in a telephone interview.

About 60 percent of the soybean crop in the top 18 producing states was in good or excellent condition as of July 31, down from 62 percent a week earlier, USDA data show.

Soybean futures for November delivery rose 17.75 cents, or 1.3 percent, to settle at $13.7975 a bushel, the biggest gain since July 13. The price has advanced 37 percent in the past 12 months.

Wheat futures for December delivery surged 38 cents, or 5.3 percent, to close at $7.5875 a bushel, the biggest gain since July 13. Earlier, the price reached $7.645 a bushel, the highest since June 14.

Corn is the biggest U.S. crop, valued at $66.7 billion in 2010, followed by soybeans at $38.9 billion, government figures show. Wheat is the fourth-largest, behind hay, at $13 billion.

To contact the reporters on this story: Jeff Wilson in Chicago at jwilson29@bloomberg.net; Brian Chappatta in Chicago at bchappatta@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net.

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