The following is an article from Bloomberg:
Corn jumped to a 14-month high and soybeans rose for a second straight day on signs of increased demand for U.S. supplies, after drought reduced crops in Russia and parts of Europe and flooding cut acreage in Canada.
U.S. exporters sold 120,000 metric tons of soybeans to China and 180,000 tons of corn to unknown destinations for delivery after Sept. 1, the Department of Agriculture said. Sales of corn in the two weeks ended Aug. 19, for delivery in the new marketing year, were 3.987 million tons, the biggest two-week total since at least 1990. Accumulated soybean sales rose to 14.7 million for delivery after Sept. 1, the most ever before the start of a new season.
“The demand for corn and soybeans has been extremely good the last two weeks,” said Bill Biedermann, a senior vice president for Allendale Inc. in McHenry, Illinois. Importers who held off on purchases expecting prices to fall as the U.S. harvest began “have not covered their needs,” Biedermann said.
Corn futures for December delivery rose 6.5 cents, or 1.5 percent, to $4.385 a bushel at 11:41 a.m. on the Chicago Board of Trade, after touching $4.4075, the highest level since June 2009. Before today, the price rose 6.2 percent this month, after Russia halted grain exports to protect domestic supplies.
Soybean futures for November delivery rose 8.75 cents, or 0.9 percent, to $10.2325 a bushel in Chicago. The most-active futures are headed for the fourth weekly gain in five weeks. On Aug. 5, the oilseed reached a seven-month high of $10.49.
Dryness Stunts Crops
Hot, dry weather during the past month in the Midwest and South is reducing the yield potential of the two biggest U.S. crops, said Dan Basse, the president of AgResource Co. in Chicago.
Some fields from South Dakota to Mississippi to Michigan have received last than 25 percent of the normal rainfall since Aug. 1, data from the High Plains Regional Climate Center show. Temperatures averaged as much as 6 degrees Fahrenheit above normal in the Midwest in the past month.
About 15 percent of the Midwest growing region and 35 percent of the lower Mississippi River Valley have been affected by the hot, dry weather, Joel Widenor, director of agricultural services for the Commodity Weather Group LLC in Bethesda, Maryland, said in a report today. Dry weather expected during the next 10 days will stunt development of corn kernels and the filling of pods with soybeans, Widenor said.
“The heat and dryness are becoming a problem, reducing yield potential, especially for corn,” said Basse, who forecast corn prices will rise to $5.25. “The U.S. crops are shrinking.”
Corn is the biggest U.S. crop, valued at $48.6 billion in 2009, government figures show, followed by soybeans at $31.8 billion. The U.S. is the world’s largest grower and exporter of both crops.