Corn rallied to a record for a second day, heading for its best month in more than two decades, as crop conditions deteriorated in the U.S. amid the worst drought in half a century. Soybeans also climbed.
Twenty-four percent of the U.S. corn crop and 29 percent of soybeans were in good-to-excellent condition as of July 29, the lowest ratings since 1988, the Department of Agriculture said yesterday. Much of the central Midwest has had less than half the normal amount of rain in the past 30 days, National Weather Service Data show. Below-normal rainfall may persist through next week, according to a Telvent DTN weather report.
“If prevailing weather conditions hold, there is further upside price risk as yields could deteriorate further,” Martin Arnold, a senior analyst at ETF Securities Ltd., wrote today in a report. “Agriculture is a slave to nature, and the recent hot, dry weather in major grain growing regions has slashed crop prospects.”
Corn for December delivery added 0.3 percent to $8.1675 a bushel on the Chicago Board of Trade at 1:08 p.m. London time, after climbing to an all-time high of $8.205. Futures rallied 29 percent this month, the biggest gain for a most-active contract since June 1988. Soybeans for November delivery rose 0.8 percent to $16.5625 a bushel, set for a monthly advance of 16 percent.
The corn crop is “not save-able” in many areas, economist Dennis Gartman wrote today in his daily Gartman Letter. Ninety- four percent of U.S. corn crops have gone through the silking stage, while only 55 percent of soybean plants are setting pods, the USDA said yesterday. Both phases are critical for determining yields. Soybeans typically mature later than corn.
“The soybean crop is now the talk of the day, and it is still possible to get a decent crop if there is rain anytime soon,” Gartman said. “But time is swiftly running out.”
More of the U.S. corn and soybean crops received “very poor” ratings from the USDA than ever before, according to Bloomberg Industries research. Twenty-three percent of corn and 15 percent of soybeans had the worst rankings as of July 29, surpassing prior lows set in 1988 and 2002.
Wheat for September delivery rose 0.3 percent to $9.17 a bushel in Chicago, heading for a 21 percent monthly gain. In Paris, November-delivery milling wheat advanced 0.4 percent to 263.25 euros ($323.32) a metric ton on NYSE Liffe, heading for a 16 percent increase in July.