Soybeans soared to the highest level since 2008 and near to a record in Chicago, while wheat gained to the costliest since February last year and corn erased a loss, on concern the worst U.S. drought in decades may persist through the growing season, pummeling yields.
Soybeans for November delivery rose as much as 0.7 percent to $16.32 a bushel, the highest level for a most-active contract since July 2008, when the price peaked at $16.3675 during the global food crisis. The oilseed traded at $16.315 at 3:09 p.m. in Singapore.
The drought in the Midwest may persist for the rest of the growing season, the U.S. Department of Agriculture said yesterday. Agriculture Secretary Tom Vilsack said the drought may cause a “small decline” in corn and soybean exports. The surge in grain and soybeans may spur a third wave of food inflation, after global price shocks in 2008 and 2011 that incited civil unrest in developing countries, Barclays Plc said.
Wheat for September delivery rose as much as 0.8 percent to $9.1075 a bushel and traded at $9.0925. The most-active price has rallied 39 percent this year.
Corn for December delivery gained 0.2 percent to $7.86 a bushel after erasing a loss of 1 percent. The price rallied to $7.89 on July 17, the highest level for a most-active contract since June 9, 2011, and near the record $7.9925 set in 2008.
Mostly above-normal temperatures and below-normal rainfall are expected to continue across the Midwest for at least the next 10 days, Telvent DTN said in a report yesterday. That will lead to further deterioration of corn and soybean crops, it said.
“It looks like the dome of high pressure that has been dominating the continental United States will continue to park itself over the Plains and parts of the Midwest for at least the next two weeks,” Brad Rippey, a USDA meteorologist, said in a statement yesterday. “More than likely, this will persist through the remainder of the 2012 crop season.”
The damage to crops and to grazing land for livestock ultimately will affect food prices, Vilsack told reporters at the White House. He described the drought as “the most serious situation we’ve had probably in 25 years.”
About 55 percent of the contiguous U.S. states were in moderate to extreme drought at the end of June, the highest percentage since December 1956, according to the National Climatic Data Center. Crop conditions on July 15 fell to the lowest since 1988, when a drought cut corn output by 30 percent from a year earlier and the soybean harvest fell 20 percent, data from the U.S. Department of Agriculture show.
Dry weather in the U.S., as well as the Black Sea region; a poor start to the Indian monsoon and the possibility of emerging El Nino conditions suggest agricultural products may rally, Barclays said in a report e-mailed yesterday.
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