Corn and soybeans rose for the first time in three days as an expanding drought in the U.S. Midwest increased the chances that yield losses will exceed government forecasts. Wheat also rallied.
Most of the Midwest will get less than 20 percent of normal rain in the next five days, and temperatures will rise above 100 degrees Fahrenheit (35 degrees Celsius) in the four days ending July 18, according to T-storm Weather LLC. As much as 51 percent of the region got less than 25 percent of average rain in the past 14 days. The ratings of the corn and soybean crops are the lowest since 1988, government data show.
“The warmer temperatures will increase yield losses for corn and raise the risks for soybeans,” Ron Mortensen, the president of Advantage Ag Strategies Ltd. in Fort Dodge, Iowa, said in a telephone interview. “Soil moisture is empty, and you can see the crops declining daily. Crops will get smaller without a dramatic increase in rain in the next two weeks.”
Corn futures for December delivery advanced 4 percent to close at $7.3225 a bushel at 2 p.m. on the Chicago Board of Trade. The price has jumped 44 percent since June 15, reaching $7.48 yesterday, the highest for a most-active contract since Sept. 13.
Soybean futures for November delivery rose 0.4 percent to $15.29 a bushel. Yesterday, the oilseed reached $15.75, the highest since July 2008.
Wheat futures for September delivery gained 2.5 percent to $8.4675 a bushel, the third gain this week. Earlier, the price reached $8.58, the highest since April 2011.
Yesterday, the U.S. Department of Agriculture cut its outlook for domestic corn output by 12 percent, a month after predicting a record harvest. The U.S. soybean crop will be the smallest in four years, and global wheat production will be 1 percent less than forecast in June, the agency said.
Corn is the biggest U.S. crop, valued at $76.5 billion in 2011, followed by soybeans at $35.8 billion, government figures show. Wheat is the fourth-largest at $14.4 billion, behind hay.