The price of soybeans hit an all-time high Wednesday as a devastating heat wave continued to pound crops in fields.
Soybeans for August delivery rose 44.5 cents, or 2.7 percent, to finish at $16.835 per bushel. Wheat prices ended at the highest level since the spring of 2008 and corn prices are pushing toward their all-time high set in June 2011.
Hot, dry weather has blanketed much of the Midwest for weeks, causing corn and soybean crops to deteriorate. Forecasts aren't predicting any significant rainfall at least through the end of the month.
Traders are buying up contracts for both crops on expectations that supplies will remain critically tight after the harvests.
Telvent DTN analyst Darin Newsom said markets have rallied on supply forecasts for corn and soybeans before, but "this is probably a tighter supply and demand situation than we've ever seen in the past."
Both crops were in short supply heading into this year's planting season. Farmers planted one of the biggest corn crops in decades but a forecast predicting a bountiful harvest evaporated when the heat took hold last month.
The nation is in the midst of one of the widest droughts in decades. More than half of the continental United States is in some stage of drought and most of the rest is enduring abnormally dry conditions.
Most analysts believe the much of the damage done to the corn crop is beyond repair even if rain does fall. Newsom said he isn't sure an early August rainfall will be able to help farmers salvage the entire crop of soybeans.
Soybeans for November delivery, which was the most active contract, gained 29.5 cents to finish at $16.20 per bushel. December corn rose 13 cents to $7.8425 per bushel. The all-time high for corn was $7.87 per bushel in June 2011.
Wheat prices hit the highest level since the spring of 2008 on questions about global supplies after adverse weather hit crops in Russia and the Black Sea region. September wheat rose 18.25 cents to finish at $9.0325 per bushel.
Other commodities were mixed after Federal Reserve Chairman Ben Bernanke told Congress that the Fed is prepared to take additional action to stimulate the economy if unemployment stays high, but didn't offer any more clues about what those steps might be and whether they would occur soon.
Gold dropped $18.70 to end at $1570.80 an ounce, its third straight loss. September silver fell 22.1 cents to finish at $27.095 per ounce, September copper rose 1.85 cents to $3.474 per pound, October platinum decreased $16.50 to $1,404.20 per ounce and September palladium dropped $5.80 to $577.50 per ounce.
Oil prices rose after the Energy Information Administration said average oil demand increased last week for the third week in a row. Oil demand had been down most of the year compared with a year ago because slower economic growth has reduced the need for energy products.
Benchmark oil increased 65 cents to end at $89.87 per barrel in New York. Heating oil gained 3.54 cents to $2.8776 per gallon and wholesale gasoline rose 3.84 cents to $2.8834 per gallon. Natural gas jumped 17.7 cents, or 6.3 percent, to $2.973 per 1,000 cubic feet.