Corn Futures Hit Another Record On Midwestern Rain

By: Associated Press
By: Associated Press

NEW YORK (AP) -- Corn futures extended their climb, rising to a record for a third straight session Monday as heavy rains flooded fields and battered crops in Midwestern states.

Other commodities traded mostly lower, with crude oil retreating more than $4 a barrel and gold, silver, copper and wheat also falling.

Farmers are worried that excessive rain in the U.S. Corn Belt will damage recently planted crops and hurt yields, adding to the food inflation that has driven up the price of everything from eggs to meat to bread. Last week's rain-fed jump in corn prices was the largest one-week rally in the contract's history.

Corn prices are poised to go even higher, analysts say. Weekend showers dumped as much as eight inches of rain over parts of Iowa, Illinois and Indiana, and forecasts predict more bad weather later this week.

"If that rain materializes, then you can keep this upward march going," said Jason Ward, analyst with Northstar Commodity in Minneapolis. "Farmers are very concerned about lost acres. It's going to be uncertainty throughout the growing period."

Corn for July delivery jumped to a new trading record of $6.6725 a bushel on the Chicago Board of Trade before falling to settle at $6.5725 a bushel, up 6.5 cents.

U.S. farmers were expected to plant 86 million acres of corn this year, but wet weather in Midwestern states has left an estimated 4 million acres unplanted. With the corn planting season already over, 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 fell. Wheat for July delivery fell 22.5 cents to settle at $7.885 a bushel on the CBOT, while July soybeans dropped 5.5 cents to settle at $14.52 a bushel.

In energy markets, crude oil retreated as investors cashed in profits from last week's run-up. Meanwhile, Saudi Arabia said it would call for a meeting to discuss crude prices, which it said were unjustifiably high. Also weighing on prices was a statement by Treasury Secretary Henry Paulson said he wouldn't rule out intervention to stabilize the dollar, comments that boosted the greenback versus the euro.

Light, sweet crude for July delivery fell $4.19 to settle at $134.35 a barrel on the New York Mercantile Exchange.

Other energy futures also fell. July gasoline futures fell 15.4 cents to settle at $3.394 a gallon, and July heating oil futures fell 9.7 cents to settle at $3.877 a gallon.

In precious metals, gold futures fell slightly after the dollar gained against the euro, diminishing investor demand for safe-haven investments. Gold for July delivery fell 80 cents to settle at 896.10 an ounce on the Nymex, after earlier falling as low as $893.20.

Other metals also fell Monday. Silver for July delivery lost 22 cents to settle at $17.21 an ounce, while July copper fell a penny to settle at $3.613 a pound.

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