Grain Futures Rally as Frost Nips the Corn Belt
Undated (AP) _ Corn and soybean futures prices rallied Wednesday after an early frost nipped crops in Iowa, Minnesota and Nebraska. Wheat and oat futures also rose.
On other commodity markets, sugar futures surged; precious metals rose; crude oil slipped; and livestock and meat futures were mixed.
Corn for September delivery rose 3 3/4 cents to $2.32 3/4 a bushel and September soybeans jumped 9 1/4 cents to $6.40 a bushel. The November soybean contract, representing the new crop, rose 4 3/4 cents to $6.31 1/2 .
September wheat climbed 4 1/2 cents to $2.98 3/4 a bushel, while September oats edged up 1/2 cent to $1.35 a bushel.
Temperatures fell to the upper 20s overnight in the northwestern corner of the Corn Belt, where crop development is lagging.
Keith Klaassen, an Iowa farmer who said he found ice inside a corn stalk on his farm near Harris, said two neighbors reported readings of 24 degrees early Wednesday morning.
At least the upper layers of leaves were frozen on soybean fields inspected by Paul Kassel of Iowa State University. That is enough to reduce yields, he said.
Most of Iowa - the nation’s No. 2 corn and soybean producing state behind Illinois - dodged the first freeze of the season, however.
William Biedermann, research director for the futures brokerage company Allendale Inc. in Crystal Lake, Ill., said the markets rallied late in the morning when it became clear the damage was more severe than first thought.
″I had a banker call in from northwest Iowa and he said, ‘We can smell this crop out here.’ It was rotting,″ Biedermann said.
Analysts said the extent of the damage would not be known for several days.
Biedermann estimated the frost would reduce the soybean crop by 20 million bushels and the corn crop by 80 million to 120 million bushels. A week ago, the U.S. Department of Agriculture projected a soybean crop of 1.91 billion bushels and a corn crop of 7.23 billion bushels.
Daniel Basse, research director for AgResource Co. in Chicago, pegged the frost damage much lower at 15 million bushels of soybeans and 20 million to 50 million bushels of corn.
″I don’t think it’ll have a devastating impact on national yields, or even on Iowa or Minnesota yields,″ Basse said. Yield refers to the average amount of grain harvested per acre.
He added, however, that the cool weather would further hamper development and promote the spread of disease among crops in Iowa and Minnesota that already are lagging far behind the normal pace because of excessive rain in the spring and summer.
Sugar futures rose sharply on New York’s Coffee, Sugar & Cocoa Exchange. Analysts cited technical factors.
World sugar for October delivery rose .35 cent 9.75 cents a pound.
The precious metals rally continued on New York’s Commodity Exchange. October gold rose $2.70 to $347.90 a troy ounce, while September silver rose 0.4 cent to $3.976 a troy ounce.
On the New York Mercantile Exchange light sweet crude oil for October delivery slipped 10 cents to $16.86 a barrel; October heating oil rose .06 cent to 51.80 cents a gallon; October unleaded gasoline slipped .09 cent to 48.07 cents a gallon; and October natural gas fell 3.4 cents to $2.123 per 1,000 cubic feet.
Cattle futures ended narrowly mixed on the Chicago Mercantile Exchange. Pork futures fell sharply as sales of hogs to meatpackers rose.
Live cattle for October delivery ended unchanged at 74.90 cents a pound; September feeder cattle fell .35 cent to 87.05 cents a pound; October live hogs fell .83 cent to 48.87 cents a pound; February frozen pork bellies sank 1.32 cents to 48.55 cents a pound.