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Corn futures prices advanced, boosted by forecasts for more hot and dry weather in the Midwest.
In electronic trading, Chicago Board of Trade futures for July delivery were up 22 1/4 cents, or 3.8%, at $6.13 1/4 a bushel. December corn is up 28 3/4 cents, or 5.2%, at $5.82 3/4 a bushel, the contract’s highest level since January.
Forecasters predict hot temperatures and low chances of rain across the corn belt this week. Temperatures could reach 100 degrees later this week in areas including parts of Missouri and Illinois, according to the National Weather Service.
For this weekend and next week, the National Weather Service also forecasts above-average temperatures and below-average chances of rain across most of the Midwest. The Dakotas and Minnesota have above-average chances of rain for part of that period, and those regions have had sufficient rain in recent weeks, but a shift toward drier weather could still threaten crops there.
Farther south, key growing areas like southern Illinois and Indiana have faced worsening dry conditions for weeks.
Weather in the next few weeks will have a major influence on crop yields as corn will be in its delicate pollination phase.
“There is no question that corn in Minnesota looks very good. There’s no question that corn in the southern Midwest is a disaster,” said Arlan Suderman, an analyst for agricultural publication Farm Futures. “This morning’s weather maps suggest that we could see adverse weather drift north with corn pollination to significantly broaden the area of substantial yield losses.”
Analysts expect the U.S. Department of Agriculture, in a weekly crop-progress report due out at 4 p.m. EDT Monday, to further cut its condition ratings for the country’s corn crop. The proportion of the crop in “good” or “excellent” condition has already slid in recent weeks due to dry weather.
Corn’s gains could be limited by a weakening in cash markets in recent days, which traders say could be due to ethanol plants facing margin pressure from the combination of high corn prices and low oil prices.
USDA reports due Friday are also a key source of uncertainty that could keep some traders cautious this week. The USDA at 8:30 a.m. Friday will issue reports on domestic grain-inventory levels and new planted-acreage estimates for corn and other crops.
- Owen Fletcher Dow Jones Newswires.