Corn prices and the related exchange traded fund are rising as the U.S. Department of Agriculture warns crops are being damaged by the excessive heat in key corn-growing regions.
The USDA recently reduced the “good-to-excellent” rating on crop conditions by 4%, the largest single-week downgrade in three years, as the hot weather scorches crops, writes Kevin Van Trump for Inside Futures.
The USDA also reported that corn “silking” increased from 35% to 65%. The late “silking” process will cause pollination to occur later into the high temperature weather that is now being forecast, which would cause further crop damage from the excessive heat.
“An increase in hot, dry weather will increase stress to the pollinating and shallow root crops,” according to a Telvent DTN report on Midwest corn prospects, reports Nigel Hunt for Reuters.
“I think they (prices) are bouncing off the crop condition report which was released by USDA yesterday which confirmed the continued deterioration of the corn and soybean crop in the U.S.,” commented Robobank analyst Erin FitzPatrick.