Corn futures rallied to a 10-month high, wheat reached the highest since February 2011, and soybeans gained on signs that a drought is expanding in the main growing region of the U.S., the world’s biggest exporter.
A “large-scale, intense heat wave” will affect most of the central U.S. during the next 10 days, increasing stress on crops after the seventh driest May-to-June period since 1895, T-Storm Weather LLC said in a report. At least 50 percent of the growing region was pressured by temperatures above 90 degrees Fahrenheit (32 degrees Celsius) in 10 of the last 14 days. This month may be the warmest July in 117 years, the forecaster said.
“There is no relief in sight, and most crops are running out of soil moisture to stay alive,” Gregg Hunt, a market analyst at Archer Financial Services Inc. in Chicago, said in a telephone interview. “This is setting up to be an international disaster.”
Corn futures for December delivery climbed 1.1 percent to close at $7.4025 a bushel at 1:15 p.m. on the Chicago Board of Trade, after reaching $7.49, the highest for the most-active contract since Sept. 13. Prices gained 6.8 percent for the week, the fourth straight advance and the longest since November.
Wheat futures for September delivery rose 0.1 percent to $8.4775 a bushel on the CBOT, after touching $8.6575, the highest since Feb. 22, 2011. The grain jumped 5.1 percent this week, the fourth straight.
Soybean futures for November delivery advanced 1.5 percent to $15.525 a bushel in Chicago, capping a 3.1 percent gain this week that was the fourth straight gain. On July 11, the price touched $15.75, the highest since July 2008.
Corn and soybean conditions as of July 8 were the worst for that date since the drought of 1988, and areas of moderate to extreme drought have expanded to 63 percent of the Midwest, government data show. About 66 percent of spring wheat was rated good or excellent, down from 71 percent the prior week and 73 percent a year earlier, the U.S. Department of Agriculture said this week.
On July 11, the USDA 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.
The U.S. is the biggest producer of corn and soybeans and the largest shipper of grain. Corn is the biggest U.S. crop, valued at $76.5 billion in 2011, followed by soybeans at $35.8 billion, government figures show.