Corn prices are skyrocketing as severe heat bakes crops in the Midwest.
December corn jumped 7.2 percent Monday to finish at $5.94 per bushel.
The searing heat comes during a critical pollination period for corn, which is eroding some of the advantage farmers had hoped for when they planted the crop early because of a mild spring.
The U.S. Agriculture Department said last week that about 63 percent of the corn crop was in good-to-excellent condition, compared with 66 percent the previous week.
The longer the fields go without rain, the more the crop may be damaged, Telvent DTN analyst Darin Newsom said. That could leave corn supplies short heading into next year.
If rain hits this week or next week, there could be some relief for the corn crop, but “I don’t know that it’s going to come back all the way,” he said.
The potential for a smaller corn harvest is driving up the price of wheat on expectations that demand will pick up because wheat also can be used to feed livestock, Newsom said. The hot weather has cut into some yields for winter wheat but supplies are expected to remain plentiful.
Soybeans are forecast to remain in tight supply, particularly if the dry weather continues.
September wheat increased 53.5 cents, or 7.8 percent, to finish at $7.41 per bushel and November soybeans gained 50 cents, or 3.6 percent, to $14.255 per bushel.
Other commodity prices were mostly higher after Spain formally requested help for its troubled banking system. Investors also are looking ahead to a European summit later this week to discuss the debt crisis.
Gold for August delivery gained $21.50 to finish at $1,588.40 an ounce, July silver rose 85.9 cents, or 3.2 percent, to $27.52 an ounce.
July copper increased 1 cent to finish at $3.316 per pound, July platinum gained $8.20 to $1,439.40 an ounce and September palladium ended up 5 cents at $607.25 per ounce.
Oil prices fell on the European debt concerns. In addition, Tropical Storm Debby appeared to be shifting away from key oil production rigs in the Gulf of Mexico which would reduce the chance for a sustained disruption in U.S. supplies.
Benchmark crude fell 55 cents to finish at $79.21 per barrel in New York. Heating oil rose 0.48 cent to end at $2.5385 per gallon, wholesale gasoline increased 7.59 cents to $2.6458 per gallon and natural gas futures ended up 6.9 cents at $2.694 per 1,000 cubic feet.
