Soybean Futures Rise To Set Another Record

U.S. soybean futures leapt to a record, buoyed by strong demand and concerns that global supplies will remain tight well into next year. Soybeans for September delivery gained seven cents, or 0.4%, to close at $17.7025 a bushel at the Chicago Board of Trade. Soybeans topped the previous record closing high set Wednesday and are up 48% for the year.

Soybean prices have surged for much of the summer as a severe drought has eroded the size of the coming U.S. harvest. Prices have picked up additional steam lately following reports of higher than expected demand. On Thursday, the U.S. Department of Agriculture said weekly export sales of soybeans totaled 721,300 metric tons, which was at the high end of traders' expectations, showing that demand for U.S. soybeans hasn't waned as prices have hit highs.

Such reports, combined with supply squeezed by drought, have made for an explosive market. "It's like watching kindling, and the smallest spark sets it on fire," said Sterling Smith, commodity strategist with Citigroup Inc. in Chicago. Read more >>

Impact of Drought on Corn Belt Worse in Over 50 Years

The U.S. Department of Agriculture gave its assessment of the historic drought Friday, forecasting national corn production at 10.8 billion bushels, down 13% from 2011 and the lowest production since 2006. The report is the USDA's first official assessment of the impact of the drought that has hit the Corn Belt and is considered to be the worst since 1956.

Midwest states went into the planting season with soils at below-average moisture levels after an unusually warm and dry winter, and the record heat in July interfered with the pollination process of corn plants. The government report said corn prices, which already have reached record levels above $8 per bushel in the last month, could go to as high as $8.90 per bushel, well above $6.40 per bushel projected in July and $4.80 per bushel projected in April at planting time.

On the Chicago Board of Trade corn futures sold for $8.27 per bushel shortly after the report was issued, as traders already had factored lower production into their numbers. Based on conditions as of Aug. 1, yields are expected to average 123.4 bushels per acre, down 23.8 bushels from 2011. If realized, this will be the lowest average yield since 1995. Read more >>

Corn prices hit record as crops shrivel

Corn prices surged to a new record high Monday, as the worst drought in more than 50 years continues to plague more than half the country. Almost 90% of the United States' corn crops are in drought ravaged areas, according to the U.S. Department of Agriculture, and nearly 40% are situated in the hardest hit spots.

Corn prices have soared more than 50% during the past six weeks as the crops continue to shrivel in relentless dry heat throughout the Midwest. They jumped another 3% Monday to a record high of $8.17 per bushel on the Chicago Board of Trade.

The Teucrium Corn ETF, which tracks a basket corn futures contracts, gained 2.5%. Soybean prices, which are up more than 20% in recent weeks, also advanced. Prices rose 1% Monday to touch $16.17 per bushel, the highest since July 23. The Teucrium Soybean ETF (SOYB) gained more than 2%. Soybean prices will likely continue to rise as the heat lingers in the area where soybeans are the major crop.

"Soybeans are second only to corn as the biggest agricultural product in the Midwest," said Alex Sosnowski, expert senior Meteorologist at AccuWeather.com. "While episodes of rain will continue over some agricultural areas in the Upper Midwest, Ohio Valley and East in the coming weeks, part of primary soybean growing areas will continue to be slammed by heat and drought." Read more >>

Crop Prices Soar

Image via Wikipedia
Prices of corn and soybeans leapt 4% Wednesday and wheat gained 1%, continuing the broad rally in commodity prices that began in June. With yesterday's gains, prices of corn futures contracts are now up 94% from their June lows; soybeans are up 51% and wheat is up 80%.

The strain on the world's food system is making policy makers nervous. The World Economic Forum cited rising demand for water, food and energy as a risk facing the world, in a separate report released Wednesday.

A rising global population and greater prosperity, said the report, "are putting unsustainable pressures on resources." The report also raised the specter of shortages, which could "cause social and political instability, geopolitical conflict and irreparable environmental damage." Read more...