A heat wave is forecast in the United States. As a result, corn and soybean prices on the futures markets rose rapidly. The corn listing on the CBoT reached its highest level in 3 weeks.
A heat wave is expected in the Midwest of the US from the middle of this week. It gets very warm with temperatures of 35 to 40 degrees Celsius. It will remain largely dry in the near future in this important grain production area. However, rain is expected in parts of the Midwest in the aftermath of Hurricane Barry.
There are particular fears for soy crops. They were sown in wet conditions and are not doing well. The heat wave is expected to damage crops even more. The same applies to maize as to soy: the crops are often in poor condition, and the heat wave is on top of that. Moreover, the heat wave comes exactly during the important pollination period of the crop.
Poor crop conditions
Figures from the United States Department of Agriculture (USDA) can be helpful to provide an overview of the current corn situation in the US. The figures from Monday evening, July 15, estimate that 58% of the crop is in good condition, compared to 72% a year ago. Traders expect this percentage to be reduced even further.
Despite data from the USDA in which the corn area was adjusted positively, the corn quotation continues to rise. Traders simply don't believe the USDA's figures on larger acreage are accurate. Corn prices on the CBoT are at their highest level in 5 years. The soy quotation also shows an increasing trend.