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CHICAGO—U.S. grain futures soared on renewed concerns about hot weather reducing the size of the coming corn harvest.
Weather forecasters said Tuesday that intense heat in July would reduce the corn-crop yields, which would leave less to feed livestock and make into ethanol.
The warnings sparked fears of tightening grain supplies, driving corn and wheat prices sharply higher at the Chicago Board of Trade. Corn for September delivery rose its one-day, 30-cent limit, rising 4.4% to a nearly three-week high of $7.1125 a bushel. Soft red winter wheat for September delivery climbed 41.5 cents, or 6.1%, to $7.18 a bushel.
Commodity Weather Group, a private weather firm, cut its national yield estimate for corn by 4.3% to 150 bushels an acre, saying crop losses "were particularly exacerbated by the record warm nights seen in many sections of the central and southwestern Midwest." Another forecaster, Cropcast Ag Services, confirmed warm nights in July "were leading to smaller and lighter kernels and thus lower corn yields."
The private yield estimate shocked traders because it was below the U.S. Department of Agriculture's last forecast of 158.7 bushels an acre. The USDA is slated to update its outlook in a monthly report next week. The USDA already downgraded crop ratings for key states in a weekly report Monday. Traders focused on the declining conditions rather than on the overall rating for the national corn crop, which stayed steady from last week.
"The state numbers seem to make sense," said Jerry Gidel, an analyst for North America Risk Management Services, a brokerage in Chicago.
Traders are keeping a close eye on crop conditions as farmers need to harvest a large crop to replenish low supplies. Corn futures have pulled back 11% since reaching a record high near $8 a bushel in early June, although grain users remain nervous about threats to the crop.
A large harvest is critical to keeping up with strong demand from producers of livestock and ethanol, the corn-based biofuel. Concerns about corn supplies support wheat prices because both grains are used for animal feed. Tighter corn inventories and higher corn prices indicate livestock producers will increase demand for wheat as a substitute feed ingredient.
CHICAGO—U.S. grain futures soared on renewed concerns about hot weather reducing the size of the coming corn harvest.
Weather forecasters said Tuesday that intense heat in July would reduce the corn-crop yields, which would leave less to feed livestock and make into ethanol.
The warnings sparked fears of tightening grain supplies, driving corn and wheat prices sharply higher at the Chicago Board of Trade. Corn for September delivery rose its one-day, 30-cent limit, rising 4.4% to a nearly three-week high of $7.1125 a bushel. Soft red winter wheat for September delivery climbed 41.5 cents, or 6.1%, to $7.18 a bushel.
Commodity Weather Group, a private weather firm, cut its national yield estimate for corn by 4.3% to 150 bushels an acre, saying crop losses "were particularly exacerbated by the record warm nights seen in many sections of the central and southwestern Midwest." Another forecaster, Cropcast Ag Services, confirmed warm nights in July "were leading to smaller and lighter kernels and thus lower corn yields."
The private yield estimate shocked traders because it was below the U.S. Department of Agriculture's last forecast of 158.7 bushels an acre. The USDA is slated to update its outlook in a monthly report next week. The USDA already downgraded crop ratings for key states in a weekly report Monday. Traders focused on the declining conditions rather than on the overall rating for the national corn crop, which stayed steady from last week.
"The state numbers seem to make sense," said Jerry Gidel, an analyst for North America Risk Management Services, a brokerage in Chicago.
Traders are keeping a close eye on crop conditions as farmers need to harvest a large crop to replenish low supplies. Corn futures have pulled back 11% since reaching a record high near $8 a bushel in early June, although grain users remain nervous about threats to the crop.
A large harvest is critical to keeping up with strong demand from producers of livestock and ethanol, the corn-based biofuel. Concerns about corn supplies support wheat prices because both grains are used for animal feed. Tighter corn inventories and higher corn prices indicate livestock producers will increase demand for wheat as a substitute feed ingredient.