Soybeans resumed a rally that sent prices to a four-year high yesterday on speculation that hot, dry weather during the next 10 days will curb production in the U.S., the world’s biggest producer. Corn fell.
Temperatures will approach 100 degrees Fahrenheit (38 degrees Celsius) from Texas to South Dakota through July 28, intensifying crop stress at a key stage of soybean growth, World Weather Inc. said in a report. Showers in the northern and eastern Midwest will provide temporary relief in the next week. Soybeans produce pods and fill them with seeds during late July and August. Prices are up 21 percent since mid-June.
“The forecast remains threatening, and the market is assuming declining supplies,” said Brian Grete, the chief market analyst for Professional Farmers of America newsletter in Cedar Falls, Iowa, said in a telephone interview. “Until we get concrete signs of slowing demand, the shrinking crops will support prices.”
Soybean futures for November delivery rose 0.2 percent $15.923 a bushel at 10:32 a.m. on the Chicago Board of Trade, after gaining as much as 0.9 percent. Yesterday, the price reached $16.07, the highest for a most-active contract since July 2008. The December-delivery contract for soybean meal, an animal feed, rose as much as 1.3 percent to a record $471.70 per 2,000 pounds.
Corn futures for December delivery dropped 0.3 percent to $7.6875 a bushel on the CBOT. Yesterday, the price reached $7.89, the highest for a most-active contract since June 9, 2011, before closing down 0.2 percent. The grain has rallied 52 percent since mid-June.
About 55 percent of the contiguous U.S. states were in moderate to extreme drought at the end of June, the highest percentage since December 1956, according to the National Climatic Data Center. Crop conditions on July 15 fell to the lowest since 1988, when a drought cut corn output by 30 percent from a year earlier and the soybean harvest fell 20 percent, data from the U.S. Department of Agriculture show.
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