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Corn Rises as No End Is Seen for Drought

July 16, 2012 at 16:52 by Andriy Moraru

The corn recovered a part of its Friday losses today as commodity traders continued betting on the appreciation of crops. The ongoing drought has already affected 26 states and was named the worst one since 1988 by the USDA.

Although the corn failed to rise past Friday’s highest level, it managed to rise after a bearish opening and recover about a half of the Friday’s losses. It is now trading not far from its 2012 maximums. The growth in corn prices is accompanied by the growth in inflation-hedge commodities (such as gold and silver) and the decline in non-US grown agriculture (such as sugar and cocoa).

Last Friday, CFTC released its Commitment of Traders (COT) report, which revealed an increased number of bullish positions on commodities by the hedge funds. The long bets on corn increased for the fifth week in a row as the adverse weather conditions persisted.

Corn rose from $749.75 to $770.50 per 100 bushels as of 16:48 GMT on CBoT today. It has set its 2012 maximum at $794.00 per 100 bushels during the previous trading session.

If you have any questions and comments on the commodities today, use the form below to reply.

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