Commodities entered a bull market, gaining 21 percent from a June low, as grain prices surged following the most-severe U.S. drought in half a century.
The Standard & Poor’s GSCI Spot Index of 24 raw materials rose 0.9 percent to settle at 675.55 at 4 p.m. in New York. The gauge has jumped 21 percent from this year’s lowest close of 559 on June 21. A gain of more than 20 percent is the common definition of a bull market.
Soybean futures rose to a record today in Chicago, and corn has soared 66 percent since mid-June. The U.S. Department of Agriculture has declared almost 1,600 counties in 32 states as natural-disaster areas after the drought seared millions of acres of pasture and cropland.
“The grains have been the strongest-performing subsector in commodities the past few months, and that has purely been driven by supply-side considerations and the U.S. drought in particular,” said Sudakshina Unnikrishnan, a London-based analyst at Barclays Plc.
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