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Corn Futures Gain as Hot, Dry Weather May Threaten Midwestern CropsJuly 2nd, 2008Corn futures rose the most in three weeks on speculation that hot, dry weather will threaten U.S. crops that already have smaller root systems than normal after the worst flooding since 1993. A fading La Nina weather pattern is pushing rain and cool weather away from soggy Midwest fields, bringing a warm, dry spell, said Dave Tolleris, president and meteorologist for WXRisk.com in Richmond, Virginia. Temperatures in Des Moines, Iowa, will top 90 degrees Fahrenheit (32 degrees Celsius) for at least 12 days from July 6 to July 20 with little rain, he said. ``The trade will be shocked at just how fast this year's crops begin to show stress as the excessive water in the subsoil will be hard to tap by shallow-rooted crops,'' said James Gerlach, president of A/C Trading Co. in Fowler, Indiana. ``You could hardly pick a worse time for heat to develop as corn pollination won't begin in earnest this year until mid-July.'' Corn futures for December delivery rose 28.5 cents, or 3.8 percent, to $7.805 a bushel on the Chicago Board of Trade, the biggest gain for a most-active contract since June 11. The price gained 33 percent in the second quarter and reached a record $7.9925 on June 27 as flooding reduced the number of acres farmers will be able to harvest. The most-active futures have more than doubled in the past year as global reserves are forecast to fall to a 24-year low before the start of the U.S. harvest. Prices also rose on speculation the number of acres farmers will harvest will fall from the current forecast because of damage from flooding, Gerlach said. U.S. PlantingAbout 87.3 million acres were planted with corn, the USDA said in a report June 30. That's up 1.9 percent from a March forecast based on farmers' intentions and down 6.7 percent from 93.6 million acres sown last year, the most since 1944.The USDA estimated the number of corn acres that will be harvested at 78.9 million, up from 78.8 million projected on June 10. That's 90.4 percent of total acres planted, which is the same as the average for the prior eight years and less than 92.4 percent last year. Harvested acreage fell to 85.9 percent of planted acreage after the flooding in 1993. There have been four years since 1993 where corn plantings were less than 45 percent completed by May 5, like this year, Gerlach said. The number of acres USDA said farmers would harvest fell 500,000 to as much as 3.25 million from the June forecast to the August report, Gerlach said. ``Speculation on lost acres will remain high,'' Gerlach said. ``USDA has a strong tendency to cut harvest acreage further from June to the August crop report.'' Corn is the biggest U.S. crop, valued at a record $52.1 billion in 2007, with soybeans in second place at $26.8 billion, government figures show. - Jeff Wilson in Chicago at Bloomberg. Click here for your Free Corn Futures Trading eGuide | |