Corn Surges To New Record On Rainy Weather, Dollar

By: Associated Press
By: Associated Press

NEW YORK (AP) -- Corn futures shot up to a record for a second day Friday, driven higher by heavy rain in Midwestern states, a slumping dollar and skyrocketing crude oil prices.

Other commodities traded broadly higher, with crude oil soaring more than $11 and gold, silver, copper and other agriculture futures also rising sharply.

Heavy rains have flooded corn crops in Indiana, Ohio, Nebraska and other states, giving farmers their wettest spring since 1993 and severely delaying planting. Forecasts show the bad weather moving toward the western corn belt states of Minnesota and Wisconsin over the next several days.

"It's all about the weather. People have had to replant fields a third time and it's completely unknown how the flooding is going to affect yields," said Elaine Kub, analyst with DTN in Omaha.

Corn for July delivery surged to an all-time high of $6.6325 a bushel on the Chicago Board of Trade before easing back to settle at $6.5075, up 7.5 cents. It was corn's highest settlement price ever. Prices have jumped nearly 40 percent since the start of the year.

U.S. farmers were expected to plant 86 million acres of corn this year, but wet weather in Midwestern states has left 4 million acres unplanted. If the remaining fields aren't planted by June 10, farmers will either leave them empty and take insurance payments or switch the acres over to soybeans, which have a later growing cycle.

That would likely lift corn prices further, forcing consumers to pay higher grocery bills for meat and pork, as livestock producers would be forced to pass on higher animal feed costs and thin their herd size.

Other agriculture futures also rose. Wheat for July delivery rose 25.5 cents to settle at $8.11 a bushel on the CBOT, while July soybeans added 5.5 cents to settle at $14.575 a bushel.

Meanwhile, rough rice futures for July delivery added 60 cents to settle at $19.96 per 100 pounds.

In energy futures, oil prices soared more than $11 to a new record above $139 after a Morgan Stanley analyst predicted prices could hit $150 by the Fourth of July. More slippage in the dollar also push prices higher, while mounting tension in the Middle East added to the rally.

Light, sweet crude for July delivery jumped as high as $139.12 on the Nymex, before easing slightly to settle at $138.54, up $10.75. Prices hit a previous record of $135.09 a barrel on May 22, and settled Thursday at $127.79.

Other energy futures also traded higher. July heating oil futures rose 29.32 cents to settle at $3.974 a gallon while July gasoline futures rose 21.35 cents to settle at $3.548 a gallon.

In precious metals, gold futures shot up nearly $25 after the dollar weakened, boosting demand for the metal as an inflation hedge.

Gold for July delivery rose $23.50 to settle at $899 an ounce on the Nymex, after earlier rising as high as $902.80.

Other precious metals also traded higher. July silver rose 26 cents to settle at $17.43 an ounce on the Nymex, while July copper added 8 cents to settle at $3.623 a pound.

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