Submitted by Fox First at Ten on July 16th
By SANDY SHORE
AP Business Writer
Prices for wheat, corn and soybeans are racing higher with little relief in sight from blistering heat across much of the nation's farmland.
Wheat and corn jumped more than 4 percent Monday. Soybeans rose 2.4 percent.
Several weeks of hot, dry weather has caused damage to corn and soybean crops in fields, and there is little rain in the forecast over the next couple of weeks. Wheat has been hurt by adverse weather both in the U.S. and in the Black Sea region of Russia.
Traders are buying up contracts, pushing prices higher, on expectations that supplies will be smaller heading into the winter. "If we have 10 more days of dryness, this market should not stutter at all...we should just continue to march higher," said Mike Zuzolo, president of Global Commodity and Analytics LLC.
As the weeks pass with little improvement, livestock producers, food companies and consumers are bracing for higher prices.
Hog and poultry producers use corn as feed. If prices rise too high, they are likely to sell off more animals, Zuzolo said. That should benefit consumers initially because there would be more meat available, but prices likely would begin to climb around the holidays.
Prices for food made from grains, such as breads and cereals, may begin rising within one to two months, depending on the amount of grain in the product and the company's strategy, analysts have said.
Corn for December delivery rose 32.25 cents to finish at $7.725 per bushel. September wheat gained 36.75 cents to $8.845 per bushel and November soybeans increased 38 cents to $15.905 per bushel.
Other commodities were mixed as traders speculated whether more disappointing U.S. economic news would prompt the Federal Reserve to take action to promote growth.
The Commerce Department said consumer spending fell in June in nearly every major category, from automobiles and furniture to appliances and department stores. It marked the third straight month of declining retail sales.
The weaker retail spending, combined with other recent negative news, may be enough to cause the Federal Reserve to take additional steps to encourage borrowing and spending. The Fed's policy committee will meet at the end of this month.
Gold for August delivery fell 40 cents to end at $1,591.60 an ounce, September silver dropped 4.8 cents to $27.321 per ounce and September copper decreased 1.9 cents to $3.485 per pound.
October platinum fell $17.90 to $1,417.30 an ounce and September palladium ended down $7.80 at $577.85 an ounce.
In energy trading, benchmark crude rose $1.33 to finish at $88.43 per barrel in New York. Heating oil increased 3.95 cents to $2.8277 per gallon, wholesale gasoline climbed 3.86 cents to $2.8547 per gallon and natural gas fell 7.3 cents to $2.801 per 1,000 cubic feet.
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AP Economics Writer Martin Crutsinger contributed to this report.
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