July 27 (Bloomberg) -- Corn rose to a one-week high on speculation that hot, dry weather has caused irreversible damage to the crop in the U.S., the world’s biggest producer and exporter. Soybeans fell for the second time in three days.
Temperatures will be about 8 degrees Fahrenheit above normal the next week in the Midwest and South, increasing stress on crops, according to T-Storm Weather. For most of the Midwest, average overnight lows in July will be the highest since the 1930s, the Commodity Weather Group LLC said in a report.
“We have heat coming back into the Midwest, and that will hurt crops that lack adequate moisture,” Jeff Beal, a market analyst for Rockford, Illinois-based Gulke Group Inc., said in a telephone interview. “While the hottest and driest conditions are staying south of the biggest growing areas, the high nighttime temperatures probably already hurt yields.”
Corn futures for December delivery rose 4.75 cents, or 0.7 percent, to close at $6.915 a bushel at 1:15 p.m. on the Chicago Board of Trade. Earlier, the price touched $6.93, the highest since July 20. The most-active contract has gained 83 percent in the past year amid declining global supplies.
World inventories before the start of the Northern Hemisphere harvests are projected to fall 16 percent to 120.88 million metric tons from a year earlier, the U.S. Department of Agriculture said earlier this month.
“There’s just no supply margin for U.S. crop losses,” Beal said.
Soybeans fell on speculation that plants can withstand the heat and dryness better than corn, Beal said. Rains in August may offset hot temperatures and boost yields, he said.
Soybean futures for November delivery dropped 8.25 cents, or 0.6 percent, to $13.805 a bushel on the CBOT. The oilseed gained 43 percent from a year ago on record Chinese demand for U.S. supplies.
Corn is the top U.S. crop, valued at $66.7 billion in 2010, followed by soybeans at $38.9 billion, government data show.
--Editors: Daniel Enoch, Patrick McKiernan.
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