Crop prices closed higher Tuesday after the government reported that the U.S. corn crop isn't growing as well as previously thought because of hot weather.
The U.S. Department of Agriculture released a report late Monday afternoon that showed 62 percent of the corn crop in 18 states that produce the vast majority of corn in the U.S. is rated "good or excellent." That's down 4 percent from last week and 10 percent from the same time last year.
Corn for December delivery rose 12.25 cents Tuesday to settle at $6.8675 a bushel.
Prices for other crops also rose. September wheat rose 5.5 cents to settle at $6.94 a bushel and November soybeans gained 16.75 cents to $13.8875 a bushel.
Traders are closely following any change in corn yields because reserves are at historically low levels. Farmers planted the second biggest corn crop this year since World War II, but demand for that corn has grown faster than supplies over the last decade.
A heat wave in the Midwest appears to have hurt the crop while it is still relatively young and vulnerable, said Brandon Marshall, an analyst with Northstar Commodity Research. Corn is pollinating and setting kernels this time of year, and 100 degree temperatures could stunt that process.
With backup supplies tight, any disruption in this year's crop could cause prices to climb. "We needed to have every bushel count. We needed to offset demand, and now we're already seeing that yields have already been dropped," Marshall said.
In other trading, precious metals prices rose as uncertainty continued over the U.S. debt limit. If no agreement is reached by Aug. 2, the United States could default its debt, which would be sure to roil financial markets.
In the face of such uncertainty, investors have been buying up hard assets like gold and silver as a hedge against possible turbulence in markets for currencies, bonds and stocks.
Gold for August delivery rose $4.60 to settle at $1,616.80 an ounce. September silver gained 33.7 cents to settle at $40.698 an ounce.
September copper rose 7.15 cents to settle at $4.4780 a pound, October platinum gained $13.20 to $1,807.20 an ounce and September palladium rose $27.10 to $836.10 an ounce.
Benchmark crude for September delivery rose 39 cents to settle at $99.59 per barrel on the New York Mercantile Exchange.
In other Nymex contracts, heating oil rose 0.44 cents to settle at $3.1251 per gallon, gasoline rose 1.68 cents to $3.0985 per gallon and natural gas fell 2.4 cents to $4.331 per 1,000 cubic feet.