Corn, Soybeans Hit Records On More Midwest Rain

By: Associated Press
By: Associated Press

NEW YORK (AP) -- Corn and soybean prices soared Thursday, climbing to new all-time highs after more thunderstorms drenched Midwestern states and left recently replanted crops underwater again.

A big rally in crude oil also pushed corn and soybeans higher. OPEC's president said oil could surpass $150 a barrel later this year, sending prices up nearly $4. Crude's rise boosted other commodities, with gold, silver and copper trading sharply higher.

Severe thunderstorms overnight and Thursday morning rattled parts of Iowa and Missouri, dumping as much as 5 inches of water and threatening to push rain-swollen rivers over their banks. More bad weather was expected Friday, raising concerns that corn crops already damaged by recent flooding may not dry out in time for the critical July growing period.

"It's threatening a yield that wasn't going to be that good anyway. Now, you've just hit them again," said Jason Ward, analyst with Northstar Commodity in Minneapolis. "Anything that was replanted is now underwater again."

Corn for December delivery shot up to an all-time high of $7.95 a bushel on the Chicago Board of Trade before pulling back slightly to $7.90, up 25 cents. It was corn's ninth trading record in the last three weeks.

Soybeans for November delivery surged to a new record of $15.69 a bushel on the CBOT before easing back to $15.625, up 37.5 cents. Wheat prices also jumped, with the September contract gaining 36.75 cents to $9.57 a bushel on the CBOT.

Corn prices have surged 80 percent and soybeans have risen 36 percent in the past year, driven up by a global rush for grains to feed people and livestock and make biofuel. But excess rain in the Midwest - which grows half the world's corn - has been the biggest driver of prices lately.

The U.S. Department of Agriculture on Monday will give a partial report of the impact of Midwest flooding on crops. Estimates range from 2 million to 5 million acres of U.S. farmland being damaged or destroyed - a huge loss that would depress crop yields and almost certainly send world food prices higher.

The spike in grain prices mean consumers can also expect to pay more for meat and dairy products as livestock owners are forced to thin their herds and flocks to cope with rocketing costs for corn- and soybean-based animal feed.

Thursday's agriculture rally followed on the back of crude. Oil surged after Chakib Khelil, president of the Organization of the Petroleum Exporting Countries, predicted prices could rise to between $150 and $170 a barrel this summer but would not hit $200.

Light, sweet crude for August delivery rose as high as $138.95 a barrel in pre-market trading on New York Mercantile Exchange. Prices later retreated to $137.90 in early afternoon trading, up $3.35 a barrel.

Also lifting crude were news reports that the head of head of Libya's national oil company said the country may cut crude production because the oil market is well supplied.

Other energy futures also rallied Wednesday. July gasoline futures jumped 8.16 cents to $3.4757 a gallon on the Nymex, while July heating oil futures rose 11.73 cents to $3.8665 a gallon.

Crude's run also lifted precious metals, with gold rising more than $30 as investors bought the metal as a hedge against inflation.

Gold for August delivery jumped $30.30 to $912.60 on the Nymex, after earlier rising as high as $918.

July silver rose 68.2 cents to $17.185 an ounce on the Nymex, while July copper added 5.5 cents to $3.828 a pound.

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