Soybeans for November delivery, which prices the crop in the field now, rose 32 cents per bushel to $14.25 in morning trading on the Chicago Board of Trade on concerns that the dry weather in the heart of the soybean belt in Iowa and Illinois will hurt yields.
Corn prices meanwhile jumped unexpectedly by 24 cents per bushel to extend its record price to $7.67 on the same weather-related concerns.
“Weather is still an issue, and traders see the dry areas of the Midwest significantly reduced in the past week or more, but the driest areas of eastern Iowa, central Illinois and western Indiana remain a concern,” the Board of Trade said in market commentary.
“These areas look mostly dry for the next week, and traders see warmer weather into the middle of next week as a reason to believe that crops could begin yellowing, which would mean further pod-setting would not occur, which could worsen the yield outlook.”
While the U.S. Department of Agriculture has lowered its corn yield projections for 2011 it has largely left alone soybean forecasts, largely because soybeans were considered to be less threatened than corn by the July heat wave that was the hottest in Iowa since 1955.
But most of Iowa has received only half of its normal rainfall during the last month. The National Weather Service forecast for most of Iowa shows no more than 30 percent chance of rain through next Tuesday.
“We’ve had five consecutive weeks of below-average precipitation,” said State Climatologist Harry Hillaker, “and there’s not much relief in sight.”
The Pro Farmer crop inspection tour has pegged Iowa’s yield at 165 bushels per acre, equal to 2010 and 12 bushels per acre below the most recent USDA forecast for Iowa.