Corn prices surge as sizzling heat stresses crops

AP News
Posted: Aug 02, 2011 3:58 PM
Corn prices surge as sizzling heat stresses crops

Corn prices surged 4.4 percent Tuesday as sizzling heat stressed crops in four of the nation's top five producing states.

Corn for December delivery rose 30 cents to settle at $7.1575 a bushel.

The U.S. Agriculture Department reported late Monday that 62 percent of the corn crop was in good-to-excellent condition across the growing region. That compared with 71 percent in good-to-excellent condition a year ago.

Conditions worsened in four of the top five producing states _ Iowa, Illinois, Indiana and Nebraska _ as hot weather prevailed and rain was elusive, Northstar Commodity analyst Jason Ward said. The only state among the top five where conditions improved was Minnesota.

Other agricultural contracts also rose. September wheat rose 41.5 cents to settle at $7.18 a bushel and November soybeans gained 17.75 cents to $13.7975 a bushel.

In other trading, gold closed above $1,644 an ounce for the first time as investors sought a hedge against currency movements and economic weakness.

Gold is considered a relatively stable asset that can hold its value during uncertain economic times. Gold for December delivery rose $22.80 to settle at $1,644.50 an ounce. The price was a record in terms of dollars per ounce, but it remains below its peak in the early 1980s after accounting for inflation.

In other metals trading, silver for September delivery rose 78.3 cents to $40.092 an ounce, September copper fell 1.5 cents to $4.395 a pound, October platinum fell $1.10 to $1,793.50 an ounce and September palladium fell $2.60 to $826.90 an ounce.

Dave Meger, vice president of metals trading at Vision Financial Markets, said the signs of slower economic growth have hurt industrial metals such as copper and platinum. But he believes the outlook for the metals is positive because they will be needed as demand improves over the long term.

Energy prices all settled lower.

Benchmark crude for September delivery dropped $1.10 to settle at $93.79 per barrel on the New York Mercantile Exchange.

In other Nymex contracts, heating oil fell 0.58 cent to settle at $3.0916 per gallon, gasoline fell 1.67 cents to $3.0373 per gallon and natural gas fell 3.3 cents to $4.155 per 1,000 cubic feet.