An anticipated late-summer heatwave is expected to raise agricultural commodity prices, which had been plummeting on previously expected large harvests.
Commodities have been on a seesaw this summer. Unseasonably cool weather in the South coupled with the expected healthy production out of the Midwest had pushed agriculture commodities down rapidly in early August. However, with worries the upcoming US heat wave will negatively affect production, and news that an already late harvest of wheat from the South will once again be delayed on stagnant rainfall, agricultural commodities have shot back up.
The grain industry usually expects to begin processing the summer wheat by early August.
Corn as well has experienced a highly unusual summer, with exceedingly favorable growing conditions in the Midwest causing an expected surplus in stockpiles. As opposed to the South, rainfall conditions in the Midwest had been ideal for corn.
On Aug. 26, the price corrected, as the latest unfavorably hot conditions affected expectations for the crop. Corn shot up 28 cents a bushel on the day for a 5.96 percent gain. Grain is also up, gaining 4 percent. Soybeans, especially sensitive to late-season heat waves, is up 4.82 percent.
Agriculture ETFs followed the daily gains of wheat, soybeans, and corn. Teucrium Corn (CORN) is up 6.24 percent to hit $37.80 a share. iPath DJ-UBS Grains TR Sub-index ETN (JJG) is up 5.81 percent to hit $49.57 a share. ELEMENTS Rogers International Commodity Agri ETN ($RJA) is up 3.12 percent to hit $8.53 a share.
PowerShares DB Agriculture Double Long ETN ($DAG) was a big winner, gaining 6.32 percent to hit $9.25 a share.
