On Monday Grain commodities took a short reprieve from their drought related run up. Oat futures were the biggest decliner in the commodities complex with a one day 3.5% drop while wheat (CBT) and soybean front month futures contracts also dropped (2.2% and 3% respectively). Here's the top 10 commodity decliners for Monday's session:
Due primarily to the drought in the midwestern U.S., Grain prices have made strong gains in 2012. The gains are even more pronounced if makes the comparison to from now until mid-June. Here's the front month futures contract chart for corn, soybeans, oats and wheat:
While not quite reaching the top spot in the record books (yet), this drought is still severe enough to get into the top 3 droughts experienced in the U.S. over the last 100 years (exceeded only by the 1930s and 1988). Conditions aren't expected to improve over the coming weeks
according to this article on Bloomberg:
A large part of the Midwest will be drier than normal through the end of the month even with the rain and lower temperatures, said Joel Widenor, co-founder of Commodity Weather Group LLC in Bethesda, Maryland. He said time may be running out for soybean yields.
“Once you get past the end of the 10-day forecast the soybean crop will be too far along in most areas to benefit from rain as far as yield potential goes,” Widenor said.
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