Bloomberg reports that corn, soybeans break higher again.
(emphasis mine) [my comment]
Corn Prices Surge Most in Three Months, Soybeans Jump on U.S. Flood Threat
By Jeff Wilson - Sep 25, 2010 12:04 AM GMT+0400 Fri Sep 24 20:04:08 GMT 2010
Corn rose the most in almost three months and soybeans jumped to a 15-month high as flooding threatened to damage fields in Minnesota, the fourth-largest grower of the crops.
More than 6 inches (15 centimeters) of rain fell since yesterday in southern Minnesota, where the soil was already saturated, according to T-Storm Weather LLC in Chicago. As much as 40 percent of the state's crops may suffer reduced yields, according to Bob Zelenka, the executive director of the Minnesota Feed and Grain Association in St. Paul.
"There could be yield losses, especially for soybeans," said Brian Grete, the senior market analyst for the Professional Farmers of America newsletter in Cedar Falls, Iowa. "We are trying to find a price high enough to slow demand," after dry weather reduced grain and oilseed production in eastern Europe and Russia, Grete said.
Corn futures for December delivery rose 22.5 cents, or 4.5 percent, to close $5.2175 a bushel at 1:15 p.m. on the Chicago Board of Trade, the biggest gain since June 30, when the government said farmers planted less than they had planned.
Corn gained 1.7 percent this week, the fourth straight weekly gain. On Sept. 20, the commodity reached $5.2375, the highest level for a most-active contract since Sept. 30, 2008.
Soybean futures for November delivery advanced 32.5 cents, or 3 percent, to $11.26 a bushel on the CBOT. Earlier, the commodity reached $11.2825, the highest price since June 2009. The oilseed, used to make animal feed and cooking oil, rose 5.3 percent this week, the biggest gain in 10 months.
Corn rose to a record $7.9925 on June 27, 2008, and soybeans reached an all-time high of $16.3675 on July 3, 2008.
Speculative buying also increased after the dollar dropped to the lowest level since February against a basket of six major currencies, gold rose to a record and crude-oil prices rose the most in two weeks, said Don Roose, the president of U.S. Commodities Inc. in West Des Moines, Iowa.
The Federal Reserve said this week IT MAY TAKE MORE STEPS TO BOLSTER THE U.S. ECONOMY [ie: PRINT MORE MONEY]. The Continuous Commodity Index of 17 raw materials rose to a 25-month high today.
"In a zero percent interest-rate environment, the investor community is focused on commodities with a declining supply situation," Roose said. "It's becoming an 'agflation' story."
Corn is the biggest U.S. crop, valued at $48.6 billion in 2009, followed by soybeans at $31.8 billion, government figures show.
Bloomberg reports that soybeans may reach $12 by December on Latin American crop outlook, china.
Soybeans May Reach $12 by December on Latin American Crop Outlook, China
By Thomas Kutty Abraham - Sep 24, 2010
Soybeans may extend gains from a 15-month high as dry weather threatens to parch harvests in Brazil and Argentina and a cold snap harms the crop in China, the biggest consumer, according to Godrej International Ltd.
Prices may trade between $11.50 a bushel and $12 a bushel by December, Dorab Mistry, director at Godrej, told an industry conference in Mumbai today. The company is one of the country' s biggest buyers of cooking oils.
Soybeans have advanced 21 percent since June 30 in Chicago on concern dryness in Brazil and Argentina, the top exporters after the U.S., may delay sowing. China bought 741,000 tons this week from the U.S., the Department of Agriculture said yesterday.
“Soybeans will go higher as Argentina and Brazil face dry weather from La Nina,” said Mistry, referring to the event that brings above-normal rain in Asia and dryness in Latin America. “The huge Chinese appetite is also key to driving up prices.”
Soybeans for November delivery, the most-active contract, reached $11.1375 on the Chicago Board of Trade, the highest level since June 2009. December-delivery soybean oil surged 2 percent to 44.81 cents a pound.
“Soy at $11 is still not hurting consumption as the U.S. dollar is also weakening,” Mistry said.
The USDA reports on gulf export bids.
Baton Rouge, LA Fri Sep 24, 2010
USDA-LA Dept of Ag Market News
Gulf Export bids and basis for grain delivered to gulf export elevators, barge to Louisiana Gulf (Mississippi River), prompt or 30 day shipments, dollar per bushel, except sorghum per cwt.
Bids as of 1:30 Central time; Subject to change.
Midday bids and basis for US 2 Corn
Cash Bids Change Basis
Sep= 5.5675 - 5.5975 up 23.5-up 25.5 +35 Z to +38
Oct= 5.5975 - 5.6375 up 22.5-up 24.5 +38 Z to +42
Nov= 5.7175 - 5.7475 up 22.5 +50 Z to +53
Dec= 5.7475 - 5.7975 up 22.5-up 24.5 +53 Z to +58
Jan= 5.8125 - 5.8225 up 23-up 22 +47 H to +48
Midday bids and basis for US 1 Yellow Soybeans
Cash Bids Change Basis
Sep= 11.7800 - 11.8300 up 32.5 +52 X to +57
Oct= 11.8400 - 11.8600 up 32.5 +58 X to +60
Nov= 11.9600 - 11.9800 up 33.5-up 31.5 +70 X to +72
Dec= 12.0650 - 12.0750 up 32.25 +71 F to +72
Jan= 12.0850 - 12.0950 up 32.25 +73 F to +74
My reaction: The mainstream media has been working very hard to convince the world that there is “no food crisis.” Well, with corn over $5 a bushel and soybeans over $11 a bushel, it is quickly becoming difficult to pretend that everything is still “OK”.