Corn futures top the $8 barrier

Chicago corn futures broke above $8/bushel for the first time ever overnight. Soybean futures are also trading at record levels.

John Hawkins

Published: Jul 19, 2012

Chicago corn futures are trading at record-high levels Thursday morning, boosted by the idea that higher prices are still needed to reduce demand as a drought shrinks the expected size of the U.S. harvest.

In electronic trading, Chicago Board of Trade futures for September delivery traded as high as $8.12 a bushel overnight, surpassing the previous all-time front-month intraday high of $7.99 3/4 a bushel that was reached in June 2011.

Morgan Stanley (MS) said Thursday it had increased its corn, soybean and wheat price forecasts due to the drought. The bank raised its 2012-13 corn price forecast to $7.85 a bushel from $5.75.

The spot August contract surged above the $17 a bushel level for the first time overnight after rains moving across the central U.S. failed to bring moisture to some of the driest areas of the U.S. crop belt.

USDA's chief economist Joe Glauber suggests drought damage to both corn and soybeans may turn out to be much worse than current numbers indicate. We have an audio report from RFD Radio's Matt Kaye in Washington.

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