Corn prices near highs for year as traders wonder if crop will set yield record as predicted

Corn nears high prices for year on yield questions

Corn prices climbed Monday to a level not seen since January as traders questioned whether the crop will in fact set records, as some expect.

Corn for December delivery settled up 5.5 cents at $4.4150 a bushel after hitting $4.45 earlier in the day. The record high on the December contract was $4.4975 a bushel, set in January.

As the nation’s farmers begin to harvest corn, there are some early indications the yield in some areas may be lower than the government’s forecast of a record 165 bushels per acre, Telvent DTN analyst Darin Newsom said.

“It isn’t really until the producers get out in the field that we have a better clue about what we might actually have,” he said. “You may not see those huge yields that everyone was expecting.”

Like wheat, corn prices also have benefited from the drought in Russia, which cut into its supply of feed grains. Newsom said it’s possible some U.S. corn will be exported to use as feed for livestock.

Russia imposed an export ban on wheat after hot dry weather devastated more than one-third of its wheat crop. Although the Ukrainian crop also was damaged, that nation has delayed a decision on an export ban until sometime next month.

Traders have speculated that more of the U.S. crop may be exported to help ease shortfalls in some countries as a result of the drought.

Wheat for December delivery rose 9.5 cents to settle at $7.0450 a bushel while November soybeans dipped 3.5 cents to $10.2250 a bushel.

In other trading, oil prices fell after the government said consumer spending rose just 0.4 percent in July.

That included a 2.6 percent increase in spending on gasoline and other energy products like electricity, where demand was up because of the hot summer. Many utilities use natural gas to generate electricity.

However, there are concerns Americans will buy less gas and oil in the second half of the year because of persistently high unemployment and the uneven economic recovery.

Benchmark crude for October delivery fell 47 cents to settle at $74.70 on the New York Mercantile Exchange.

In other Nymex trading in September contracts, heating oil gained 1.91 cents to settle at $2.0252 a gallon and gasoline lost 1.38 cents to settle at $1.9341 a gallon. October natural gas added 10.7 cents to settle at $3.812 per 1,000 cubic feet.

Metals were mixed.

In December futures contracts, gold settled up $1.30 at $1,239.20 an ounce; silver was unchanged at $19.074 an ounce and copper gained 4.5 cents to $3.4295 a pound.

September palladium fell $5.15 to settle at $497.90 an ounce and October platinum lost $3.90 to $1,533.10 an ounce.