Drought Concerns Bring Corn Prices to Record Level

By CnAgri2012-07-17 19:06:34 Print

Corn futures closed 34 to 40 cents higher on Monday. Corn price hit record levels during trade as drought conditions across the U.S. Corn Belt are anticipated to worsen. Front month contract closed limit up as traders fear further reductions to crop condition ratings and corn yields are unavoidable. The weekly crop progress report is expected to be bullish for prices as the trade expects to see a 5 percentage point decline to corn's good to excellent condition rating.

Soybean futures closed 39 to 40 cents higher on Monday. Lack of significant rainfall and relief from excessively high temperatures across the drought stricken Midwest pushed soybean prices higher. Traders continue to eye weather conditions across the Midwest as the region experiences the worst drought in decades and as new crop soybeans are getting ready to enter their key production stage.

Wheat futures closed 32 to 36 cents higher on Monday. The rally in the winter wheat market is not merely a 'follow the leader' trend as corn price rise. Prices were buoyed by export sales of both hard red spring wheat (69,784 tonnes) and soft white wheat (37,430 tonnes) to Japan for 2012/13 delivery. News that Russian wheat production could decline to 45 million tonnes due to adverse weather added additional support to market prices.