June 19, 2008
US corn prices near US$8 a bushel on severe crop damage
US corn prices crept nearer to an unprecedented US$8 a bushel level on Wednesday (June 17, 2008) as flood damage to cornfields may be worse than early estimates.
The USDA suggested it would do a special assessment of how many acres have been lost to massive flooding last week.
Estimates of the damage float around 2 million to 5 million corn acres.
Richard Feltes, senior vice president and director of commodity research for MF Global in Chicago, said that there is a fear that the destruction may be worse than what was previously thought.
US corn for December delivery rose as high as US$7.85 a bushel on the CBOT before easing back to US$7.80.
In the most-actively traded July contract, prices rose to US$7.50 a bushel before falling back to settle 4 cents higher at $7.46.
Corn's upward movement somehow softened in the past two days due to an improving Midwest weather outlook, yet analysts warned prices could spike again as the critical July corn-growing period nears.
Feltes pointed out that the US corn is in the verge of a disaster if an adverse weather will be encountered around July.
If the situation worsens, US corn could be around US$10 and soy around US$20 per bushel, Feltes added.
Meanwhile, soy futures for July delivery were at US$15.56 a bushel on the CBOT, while July wheat futures were at US$9.04 a bushel.
