US corn, soy prices hit records as drought lingers

US corn and soybean prices closed at new record highs Tuesday as a new survey showed worse-than-expected crop damage from a brutal drought across the country's central breadbasket. The price of corn jumped 1.7 percent to $8.3875 a bushel, while soybeans finished at $17.3025 a bushel, up 2.8 percent from Tuesday. That left the corn price up 68 percent from June and soybeans 39 percent higher. An all-time record hot July accompanied by nearly three months of extreme drought have baked the country's prime farmland in the midwestern and central states, where the world's largest corn and soybean crops are grown. Prices jumped after reports from the annual Pro Farmer Midwest Tour gave analysts and traders more bad news on the state of the crops. "Crops in western Ohio and eastern Indiana were far below the norm," said Pro Farmer analyst Brian Grete. Yields in South Dakota meanwhile were called "stunningly low." "The Pro Farmer tour sparked the rally" Tuesday, said Frank Cholly of RJO Futures. "They have a pretty good peg at final yields," he said. The Pro Farmer estimates were significantly lower than the US Department of Agriculture's sharply slashed forecasts from last week. "We are getting less production from South America, so that forces buyers to go to the US," driving up prices, Cholly added. On August 10, the USDA sharply reduced its production forecast for the globally crucial crops, saying output would likely be at the lowest level in six years. Last week, they estimated that 50 percent of the corn crop was in poor or very poor condition, compared to 15 percent at the same time last year. For soybeans, 39 percent of the crop was in poor condition or worse, compared to 13 percent a year ago. The drought has also hit feeds for livestock like hay, forcing ranchers to trim their herds, which analysts expect could push up the price of meat in the coming year.