Heat wave pushes soybean prices sky high

Soybean meal on Thursday exceeded the record set during the 2007-08 food crisis. Benchmark CBOT July soymeal futures rose to a record $475 per short ton, up 4.6%.

 

Other futures markets also surged late in the session. Corn was at its highest in more than a year, with benchmark CBOT July corn reaching $7.76¾ a bushel, up 8.1% on the day.

 

The December contract, against which much of the coming harvest will be priced, hit a peak of $7.13 a bushel, up more than 37% over the last three weeks.

 

The jump in prices will specifically hurt chicken processors since poultry eat more than 40% of the meal crushed from US soybeans.

 

Meal prices soared along with broader grain markets as drought and temperatures of more than 100°F (38°C) were forecast to continue in US corn belt states such as Illinois, Indiana and Iowa, threatening crop yields.

 

The rally in corn and soybean prices also dragged wheat prices higher. CBOT July wheat rose 5.2% to $8.22½ a bushel, the highest since May 2011, when the market was still wrestling with the impact of an export ban in Russia.