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Corn prices surge as crops droop in hot weather

Sandy Shore, AP Business Writer

The price of corn jumped 3.5 percent Monday as crops have begun drooping under a blanket of hot weather across the Midwest.

The blistering weather has sent temperatures above normal in parts of several states, including Indiana, Illinois, Ohio, Kansas, Nebraska and Iowa.

Recent U.S. Agriculture Department reports have shown deteriorating conditions in the corn crop. About 66 percent of the crop was rated in good-to-excellent condition for the week that ended June 10. That compared with 72 percent the previous week.

Traders questioned whether dry conditions would erode the quality of the crop and lead to a smaller harvest than has been expected.

If there isn't sufficient rainfall soon, yields could fall below 160 bushels per acre, predicted Mike Zuzolo, president of Global Commodity Analytics & Consulting LLC. That compares with the U.S. Agriculture Department's recent forecast of 166 bushels per acre.

Corn for July delivery rose 20 cents to finish at $5.995 per bushel. July wheat gained 20.75 cents, or 3.4 percent, to $6.3025 per bushel and July soybeans increased 8.25 cents to $13.8425 per bushel.

Other commodities were mixed as concerns persisted about Europe's debt crisis after Spain's borrowing rates hit levels that prompted other countries to seek bailout funding. It was an indication that investors were afraid Spain could default on its debt and require a bailout.

Traders have been worried that slower economic growth in Europe, China and the U.S. will continue to erode demand for commodities such as oil, copper and other industrial metals.

Gold for August delivery fell $1.10 to finish at $1,627 per ounce, July silver fell 6.9 cents to $28.671 per ounce, July copper gained 1.2 cents to $3.3955 per ounce, July platinum fell $3.10 to $1,484.10 per ounce and September palladium increased $2.75 to $633.15 per ounce.

The concerns about Spain's economic problems also pressured oil prices. Benchmark crude fell 76 cents to end at $83.27 per barrel. Heating oil declined 2.88 cents to finish at to $2.6177 per gallon and gasoline futures ended down 4.08 cents at $2.6609 per gallon.

The hot weather benefited natural gas as traders bet that demand would improve from utilities that use the fuel to generate electricity for air conditioning systems. Natural gas rose 16.8 cents, or 6.8 percent, to finish at $2.635 per 1,000 cubic feet.