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Grains Peak to New Records on Worst US Drought Since 50’s

July 19, 2012 at 15:51 by Andriy Moraru

Agricultural commodities that are largely produced in North America continued their super-rally and reached new long-term maximum levels today. The ongoing drought is now officially affecting 29 US states, some parts of southern Canada and northern Mexico.

Traders and investors bet on the grains’ supply falling far below the demand. With crops in extreme danger in 1,297 US counties according to the latest report by the US Department of Agriculture, there is a high probability for a significant shortage in corn, soybean and wheat.

Corn is in a rally since June 4 now and broke its all-time record, reaching the daily high at $8.1675 per bushel today. Soybeans also rose to a new record level today — $17.49 a bushel — almost one dollar above the previous maximum of $16.54/bushel recorded in the pre-crisis month of July 2008. Wheat reached the rate of $9.375 a bushel today — still quite far from its all-time record of $12.98.

Soybean rose from $16.8300 to $17.1325 per bushel as of 15:47 GMT on CBoT today. Corn went up from $7.695 to $7.990 a bushel, while wheat jumped from $9.0475 to $9.1875 for one bushel.

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

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