December 29, 2010

 
CBOT corn increases due to Argentine heat
 
 

CBOT corn futures increased US$0.06-US$0.07 per bushel to US$6.21 for March delivery, due to continued worries about the hot weather affecting the pollination of Argentina's corn crop.

Meanwhile, the May and July prices are at US$6.30. The Buenos Aires Grain Exchange has already warned that the hot weather will decrease Argentina's soy production by about 1% this year and similar worries apply for corn, as hot weather during planting or harvest does not affect corn but has a preferred temperature during pollination.

Temperatures in Argentina have averaged from the mid to upper 90s for the last two weeks.

Similar heat-related problems hit the corn crops in Russia and the Ukraine last summer, starting a mild worldwide panic about corn supplies. In the US, prices have surged from US$3.50 per bushel in June to what is now a two-year high for corn.

Those increased prices have almost doubled the paper cash value of Iowa's 2.2 billion bushel corn crop, from US$7.7 billion in June to more than US$13 billion this month.