US corn, soy prices hit records as drought lingers, Mississippi river level getting lower, 11-mile stretch closed for barges.

US corn, soy prices hit records as drought lingers, Mississippi river level getting lower,11-mile stretch closed for barges. (AFP), USDroughtMonitor.AFP - 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.8 percent from Tuesday. The price of corn jumped 1.7 percent to $8.3875 a bushel, while soybeans finished at $17.3025 a bushel.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."
"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. This U.S. Drought Monitor week saw a few notable improvements and some serious degradation. Temperatures have generally been below normal this week from the east side of the Rockies to the East Coast, with the exception of Texas, the Southeast Coast, and northern New England. This has helped ease drought impacts, particularly in those areas where beneficial precipitation fell. One such area is in the Ohio Valley where parts of Indiana saw more than five inches of rain. This is the second straight week of beneficial precipitation for some of these areas and this precipitation has largely alleviated Exceptional Drought (D4) from the state, despite lingering impacts still being felt. Last week, drought gripped slightly less of the agricultural land in the country with 85% of the U.S. corn crop, 83% of soybeans, 63% of hay, and 71% of cattle areas experiencing drought. Nearly half of the corn (49%) and soybean (46%) areas are experiencing Extreme (D3) to Exceptional (D4) Drought. This has led to both reduced yields and earlier harvests. Additional impacts this week include closing of an 11-mile stretch of the Mississippi River near Greenville, MS to barge traffic because of low water levels and wildfires expanding from northern California to Idaho.Read the full story here.

                                                            Mississippi river flow

Video - Shrinking Mississippi River Means Higher Prices

And From CNN: BEGIN VIDEOTAPE)

MARTIN SAVIDGE, CNN CORRESPONDENT: You might think this is some kind of desert just outside of Memphis. It`s not. I`m actually standing on the exposed bottom of the Mississippi River. That`s how dramatic the drought impact is being felt here. Hard to believe, a year ago we were talking about record flooding. Now, they are worried about a new kind of record: a record low. The river was three miles wide here, it`s now down to three tenths of a mile. And that`s causing all kinds of problems. There are some benefits, I mean, take a look over here: new beach front. In fact, some quip that now the Mississippi River has more beaches than the entire state of Florida, which would be funny if it didn`t have an impact on trade.

A lot of stuff we use goes up and down the Mississippi River. We are talking steel, coal, ore, grain. The problem is now a lot of those barges have had to lighten their loads, and even doing that, they are still running aground. There is a real fear that there could be a possibility of closing the Mississippi River. If that happens, well, all that product that used to be carried cheaply by barge is now going to be carried more expensively by truck or train. And guess who is going to pay for all of that.

(END VIDEOTAPE)