Soybean prices are at the highest level in four years after an extended spell of hot, dry weather caused crops to droop.
Soybeans for November delivery rose 51.75 cents, or 3.5 percent, Thursday to finish at $15.265 per bushel, the highest price since the summer of 2008. Corn futures jumped 5 percent and wheat finished up 4.8 percent.
Global soybean supplies are low after weather damaged crops this year in South America. China and other countries have turned to the U.S. for supplies of the protein-rich beans. U.S. farmers hoping to take advantage of the increased export demand planted about 76.1 million acres of soybeans this year, the third biggest crop on record, according to the U.S. Agriculture Department.
But growing conditions steadily deteriorated in the U.S. after a heat wave settled in over much of the country. About 45 percent of the crop was in good to excellent condition as of Sunday, compared with 53 percent the previous week, the agency reported.
“Following up on the South American drought, we really needed to see a big crop in the U.S.,” Telvent DTN analyst Darin Newsom said. “There really wasn’t any room for error.”
The hot, dry heat is also damaging corn in many states. Corn for December delivery rose 34 cents to finish at $7.085 per bushel. September wheat gained 38.75 cents to $8.38 per bushel.
Other commodities were mixed after Europe and China took steps to stimulate economic growth.
The European Central Bank agreed to cut the main interest rate to a record low of 0.75 percent. The bank is trying to make it cheaper for people and businesses to borrow and spend money.
The People’s Bank of China also cut its main lending rate. Some investors were surprised by the move and wondered if it indicated that China’s economic slowdown is worse than expected.
In metals trading, gold for August delivery declined $12.40 to finish at $1,609.40 an ounce, September silver fell 60.8 cents to $27.672 per ounce and September copper dropped 4.7 cents to $3.493 per pound.
October platinum decreased $13.70 to end at $1,477.70 an ounce and September palladium ended down $13.15 at $585.75 an ounce.
Benchmark oil fell 44 cents to finish at $87.22 per barrel in New York. Heating oil rose 0.99 cent to $2.7684 per gallon, gasoline gained 4.19 cents to $2.7648 per gallon and natural gas increased 4.6 cents to $2.945 per 1,000 cubic feet.
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AP writer Pan Pylas in London contributed to this report.
