Those businesses relying on feed commodities have certainly had to cope with a series of bullish sector trends in the past two years. Increasing demand for food in rapidly growing emerging market countries and the use of corn for ethanol have been the achieve price drivers. Now, at least for the short-term, add weather concerns. Corn approached a record $8 per bushel Monday as the prospect of more rain on already-soaked Midwest farms increased the likelihood of extensive crop damage, Bloomberg News reported.
Soybeans, wheat, and rice also rose Monday at midday after the National Weather Service predicted that flooding in the Midwest will probably result in "hundreds of millions of dollars" in crop damages. Rice, a staple for about 50% of the world, rose 50 cents to $20.80 per 100 pounds. Soybeans traded up 19 cents to $15.79 per bushel.
Economist Glen Langan, whose specializations include agricultural economics, told BloggingStocks Monday the world needs a strong harvest, across the feed spectrum, from the United States and other nations. "A strong harvest would take some of the price momentum out of corn and wheat, in particular. Unfortunately, we may be headed for a sub-par harvest in the U.S. if current weather patterns persist," Langan said.
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