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More fuel on the grain market fire

Jeff Caldwell 07/05/2012 @ 11:19am Multimedia Editor for Agriculture.com and Successful Farming magazine.

"Hot or cold, wet or dry, price the crop before the 4th of July."

That's the old adage that Agriculture.com senior contributor Red Steele says he's considered in the past when marketing grain. But, this year, that's all out the window.

"Today has proven this old adage wrong...the question now is by how much and when the screw turns," he says.

The grains remain sharply higher Thursday, with nearby soybeans more than 40 cents higher for the day, trading at $15.15 per bushel at mid-day. July corn's 18 cents higher at $6.92 1/2, while July wheat's 14 1/2 cents higher at $8.13 3/4. The current soybean price for the July contract marks a 4-year high, while July corn's sitting at a 10-month high.

The market commotion comes as the red continues to spread on the U.S. Drought Monitor map.

Red color signifies "extreme" drought conditions on that map, and on the latest version, updated Thursday, virtually all of Missouri and Kansas are under either severe or extreme drought conditions, while the amount of land in the latter category has expanded immensely in the southern Corn Belt in the last 2 weeks.

While the driest parts of the Delta and western Plains could see some relief in the coming days, the 6- to 10-day outlook shows conditions will likely continue to spiral downward in the heart of the Corn Belt, where mounting drought losses have some farmers already calling this year's crop a failure.

"The continued dry pattern across the central Midwest will allow drought conditions there to increase further," says MDA EarthSast Weather senior ag meteorologist Don Keeney. "The 6-10 day outlook offers more improvements across the Delta, Southeast, and southern and western Plains, while further reductions in moisture are expected across the central and western Midwest and east-central Plains."

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