Tuesday, December 27, 2011

South America Drought Results in Spike in American Crop Prices

Posted By on Tue, Dec 27, 2011 at 2:11 PM

A good many Idaho farmers may be paying close attention to weather forecasts for South America.

In particular, unusually dry weather south of the Equator has driven up crop prices in the United States as global supplies are threatened by the drought. Temperatures began climbing last week and rains were lighter than expected, leaving corn plants stunted in Brazil and Argentina. Strong demand from livestock producers and ethanol manufacturers have already drawn down global reserves of corn.

As a result, corn capped the longest rally in a year today, while soybeans jumped the most in 11 weeks. March wheat in the United States also saw an increase today to $6.45 a bushel following three months of steady declines.

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