Corn prices rise as Midwestern crops wilt in heat
The price of corn is climbing as a blistering heat wave wilts crops in parts of the Midwest.
Corn for December delivery rose 30 cents, or 5.1 percent, to finish at $6.24 per bushel. The price has jumped about 22 percent since the first of the month on speculation that the dry spell could lead to a smaller harvest.
Farmers got an early start on planting corn this year because of a mild winter. Hopes were high that the crop — forecast to be the most acreage since 1937 — would build up critically low supplies and satisfy strong export demand.
But above-normal temperatures, with little to no rainfall, have stressed the pollinating crops in recent days.
Mike Zuzolo, president of Global Commodity Analytics & Consulting LLC, predicted that the yield will fall short of forecasts and supplies will remain tight heading into next summer if the heat continues without adequate rain.
Traders have responded by driving up the price of corn this month. It's still more than a dollar less than the all-time high of $7.87 per bushel set in June 2011, when crops were threatened by heavy rains.
The difference this year is the concern about prospects for future demand given the European debt crisis and slowing economies in the U.S. and China, Zuzolo said. There also are fewer government programs around the world to stimulate growth than were a year ago.
Many traders are waiting for a U.S. Agriculture Department report due Friday that will provide updated amounts of how many acres of crops have been planted.
September wheat increased 6 cents to finish at $7.47 per bushel. November soybeans fell 12.25 cents to $14.1325 per bushel.
In other trading, metals prices fell and energy prices were mixed as investors remained focused on developments in Europe. Many are awaiting the outcome of a summit later this week where European Union leaders will tackle the debt crisis again.
Gold for August delivery fell $13.50 to end at $1,574.90 an ounce and July silver dropped 48.2 cents to $27.038 per ounce.
July copper was essentially flat, falling 0.3 cent to finish at $3.313 per pound. July platinum declined $12.60 to $1,426.80 an ounce and September palladium ended down $13.55 at $593.70 per ounce.
Benchmark crude rose 15 cents to end at $79.36 per barrel in New York. Heating oil gained 3.8 cents to finish $2.5765 per gallon, wholesale gasoline fell 0.07 cent to $2.6451 per gallon and natural gas futures increased 7.3 cents to $2.767 per 1,000 cubic feet.