U.S. corn surged 5 percent on T hursday to its highest price in over a year and soybeans jumped to within sight of their record high as new forecasts offered no sign of rain relief for withering crops. With fields now at the mercy of what may be the worst Midwest drought in nearly a quarter century, grain traders ignored the potentially bearish influence of a rising U.S. dollar and focused on growing signs that one of the biggest corn crops ever planted by U.S. farmers is now shrinking by the day.
Corn prices have surged by nearly 30 percent over the past two weeks, dragging wheat and soybean prices up with them and threatening to kick off another bout of food-inflation fears. Only a few times before have prices risen so far, so fast - once was in 1988, the last time the U.S. heartland faced such a dire drought.
"The general theme is going to be that the hottest weather is in the very near term but the rains still will be slow to pick up here over the next couple of weeks," said Joel Widenor, a meteorologist with Commodity Weather Group.