July 19 (Bloomberg) -- Soybean futures rose to a record and corn extended the biggest monthly rally since 1988 as the worst drought in more than 50 years threatens crops in the U.S., the world’s biggest grower.
Severe to exceptional drought expanded to 48 percent of the Midwest as of July 17 from 33 percent a week earlier, the government said today. The U.S. Department of Agriculture has declared almost 1,300 counties in 29 states as natural-disaster areas. Fields are in the worst condition since 1988, when drought cut corn output 31 percent and soybeans by 20 percent.
“Soybeans are going downhill fast, and there are few signs for relief,” Gregg Hunt, a market analyst at Archer Financial Services Inc. in Chicago, said in a telephone interview. “Expanding drought will lead very tight U.S. supplies and higher prices to slow demand.”
Soybean futures for November delivery rose 2 percent $16.53 a bushel at 12:41 p.m. on the Chicago Board of Trade, after reaching a record $16.7375. The previous all-time high for the most-active contract was $16.3675 on July 3, 2008.
The December futures contract for soybean meal, a livestock feed, rose 2.1 percent to $489 for 2,000 pounds on the CBOT, after advancing by the exchange limit of $20 to a record $499. The price is up 18 percent this month.
Corn futures for December delivery gained 0.4 percent to $7.8725 a bushel in Chicago, after rallying to $7.99. The record for a most-active contract was $7.9925 on June 27, 2008. The futures for September delivery rose as much 2.7 percent to $8.1675, the highest ever for any CBOT contract.
Corn is the biggest U.S. crop, valued at $76.5 billion in 2011, followed by soybeans at $35.8 billion, government figures show.