(AP) — Prices for corn, wheat and soybeans continued their long march upward on Wednesday, pushed higher by a crippling drought across the Midwest.
Corn for December delivery rose 16 cents, or 2 percent, to $8.165 per bushel. November soybeans rose 15.5 cents, or 1 percent, to $15.812 per bushel.
Prices for soybeans and corn have climbed all summer as a devastating drought wreaks havoc on crops. Analysts predict it could soon start affecting prices that shoppers pay in the grocery store. They'll have more clarity Friday, when the U.S. Department of Agriculture releases updated predictions on production for corn and soybeans and other crops.
Some analysts think the government is bound to step in decisively if the drought gets worse, perhaps helping farmers pay to bring in water, but it's not clear how much that would help. Rain in parts of the Midwest did raise hopes this week that some of the soybean crop can be salvaged. But some analysts believe that the corn crop, which is planted earlier and is further into its season, is beyond rescue.
No matter what the government does, it's crucial for people to adjust their demands for corn accordingly, Barclays analyst Sudakshina Unnikrishnan wrote in a note to clients Wednesday.
Sometimes, when the price of corn is rising, people who use it to feed livestock can buy wheat instead. But the price of wheat is also rising. On Wednesday, September wheat rose 10.25 cents, or roughly 1 percent, to $8.9925 per bushel.
"Friday's USDA supply estimates will catch the headlines," Unnikrishnan wrote, "but how the USDA deals with the necessary issue of demand rationing will be the key issue."
Another sticky situation the government may have to address is corn ethanol being used for fuel, which cuts down on what's left for food. Ethanol "is facing an increasing political backlash and growing demands for a waiver from the ethanol mandate," she wrote.
After three days of gains, the stock market was muted, with the major indexes split between small gains and losses. Several big consumer goods companies warned that weak demand in Europe was cutting into their revenue, and France and England issued disappointing predictions for their economies for the year.
Metals were also muted. Gold was the only key metal that moved up, with December gold rising $3.20 to $1,616 per ounce.
September silver was virtually flat, losing 1.1 cents to $28.075 per ounce. October platinum was also virtually flat, falling 20 cents to $1,410.20 per ounce. September copper fell 1.9 cents to $3.4215 per pound, and September palladium fell $1.70 to $586.50 per ounce. Prices for industrial metals like copper can indicate how investors feel about the economy, since copper is important to construction and manufacturing.
Energy commodities were mixed. Benchmark oil fell 32 cents to finish at $93.35 per barrel in New York. Gasoline fell 1.09 cents to end at $2.9804 per gallon. Natural gas fell 3.1 cents to end at $2.933 per 1,000 cubic feet.
Brent crude, which is used to price international varieties of oil, gained 14 cents to finish at $112.14 per barrel in London. Heating oil increased 1.79 cents to end at $3.0159 per gallon.