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Soy, corn extend highs; oil down but up on week

US soybean and corn prices extended their record highs o n F riday from the crop damage in America’s drought-baked heartland, while oil and copper markets fell on renewed worries about European debt.

The retreat in energy and metals prices did not prevent the commodities complex from posting a fourth straight week of gains.

The Thomson Reuters CRB index, a global commodities benchmark, settled up 3.6 percent for the week, after closing slightly lower for the session. The 19-commodity index has risen 7 percent so far for July, heading for its strongest month since October 2011.

Soybeans and corn posted their biggest five-week gain since late 2009 as relentless heat wilted crops in the US Midwest.

“Everything today is focused on the weather for soybeans,” said Karl Setzer, analyst at MaxYield Cooperative in West Bend, Iowa. “Historically, August is when the soy yield is determined, but because everything is early this year, we are seeing the buying interest show up earlier.”

Soybeans for August delivery ended up 23-3/4 cents at $17.57-1/2 per bushel on the Chicago Board of Trade, after hitting a record peak at $17.77-3/4.

Rain this week provided little relief from the most extensive US drought in 56 years, said Don Keeney, meteorologist for MDA EarthSat Weather.

That added to the worry of investors and traders as some 16 percent of the soy crop was setting pods at the beginning of the week, nearly double the average pace for this time of year, according to the US Agriculture Department.

Hotter-than-normal temperatures were expected for at least another two months in most of the contiguous 48 US states, the National Oceanic and Atmospheric Administration said, which did not rule out the drought continuing past October.

Corn for September delivery jumped to a record high of $8.28-3/4 per bushel on the CBOT before settling at $8.24-1/2, a gain of 16-3/4 cents.

The new-crop December contract gained 17-1/4 cents to $7.95-3/4. The contract has risen more than 50 percent over four weeks.

Although the rally in corn was not yet building into a food crisis, like in 2008, the price surge was still worrying as corn is used in more edible products than soy, said Abdolreza Abbassian, a senior economist and grain expert at the United Nations’ Food and Agriculture Organization.