Drought pushes soybeans and corn prices to record high
The worst drought in a half century will continue to plague most of the U.S. Midwest crop region for at least the next 10 days, with only occasional showers providing some relief mainly in the east, an agricultural meteorologist said on Thursday.
Bloomberg reports that crop prices surged in Chicago, lifting soybeans to a record, as the worst U.S. drought since 1956 scorched fields and raised chances of higher food prices.
Soybeans reached $16.5125 a bushel today on the Chicago Board of Trade, surpassing the previous peak of $16.3675 on July 3, 2008. Corn rallied to the highest since 2008 and came within 1 percent of its all-time record, while wheat surged above $9 a bushel to the highest in almost four years.
It looks a little wetter today for Michigan, Indiana and Ohio, but the west is still dry with above-normal temperatures,” said Jason Nicholls, meteorologist for AccuWeather.
Rain for the next 10 days will run the gamut from just 40 to 75 percent of normal, with the greatest stress in the western Midwest crop states such as top producer Iowa.
“It got up to 102 to 103 degrees Fahrenheit in Iowa yesterday with no rain, and will be in the 90s today with no rain,” Nicholls said.
“There is not going to be enough supply to go around,” said Richard Feltes, vice president of research at R.J. O’Brien & Associates in Chicago. “The U.S. drought is laying the groundwork for higher food inflation into 2013.”
Corn for December delivery rallied 1.3 percent to $7.945 a bushel after touching $7.98. The record for a most-active contract is $7.9925. Corn has surged 57 percent since mid-June. Futures for September delivery, the contract closest to expiration, rose as high as $8.115 today.