Ill. corn industry fearing affects of Midwest drought and heat
With intense, triple-digit heat and prolonged drought plaguing the Midwest, corn farmers and commodities investors are fearing the fate of this years' yield.
As temperatures in northeastern Illinois soared to the high 90s Tuesday, so did corn futures at the Chicago Board of Trade, which peaked at a 10-month high. December corn contracts peaked at $6.745 a bushel, the highest since August 2011. Wheat and soybean prices also jumped to $7.9925 and $14.7475 a bushel respectively.
Corn prices have been on the rise over past weeks as drought continues to pelt the region.
"There's some hope out [that in] two or three weeks that you could change the pattern," said Jerrod Kitt, Director of Research at the Chicago-based asset management firm Linn Group. Consumers could feel the brunt of a weakened corn supply in increased food prices as soon as six month from now, Kitt said.
"The problem is a lot of the damage has already been done."
Illinois farmers echoed this sentiment. A spokesperson from the Illinois Corn Growers Association said she has heard complaints from across the state--with growers in particularly rain-deprived southern Illinois reporting serious damage to their crops.
Will County corn farmer Don Werner said weekend rainfall in the Chicago area brought a brief respite, but relief needs to come soon.
"We need it to rain, somewhere, we need all the bushels we can raise," said Werner, who has been growing corn since 1976. "And I hope if it doesn't rain on my farm, I actually hope it rains on someone else's because we really need the product."
He added that conditions seemed worse in 1988 and 1991, but said the heat and drought only makes it "real hard to get caught back up."
Werner said along with increased rainfall, temperatures need to decrease to about 85 degrees for corn yields to continue to steadily grow.