The US Department of Agriculture released its weekly drought monitor today, noting that rainfall in some parts of the US last week did almost nothing to alleviate the hardest-hit areas:

[O]nly a few scattered areas of dryness and drought experienced significant improvement. In addition, the areas with the greatest temperature anomalies (average daily maxima 10 to 13 degrees above normal) generally coincided with an area of scant rainfall across the Midwest, northwestern Ohio Valley, and southern Great Plains, resulting in another week of widespread deterioration and expansion of dryness and drought in these regions. …

In the 18 primary corn-growing states, 30 percent of the crop is now in poor or very poor condition, up from 22 percent the previous week. In addition, fully half of the nation’s pastures and ranges are in poor or very poor condition, up from 28 percent in mid-June.

The report has sent corn, wheat, and soybean prices higher today, with corn up more than 4% and wheat up about 3.5%. The Teucrium Corn Fund (NYSEMKT: CORN) is up 3.85% at $47.72 in a 52-week range of $35.23-$50.69.

Stocks that aren’t doing so well are food processors, for which higher grain prices mean higher costs. The Coca-Cola Co. (NYSE: KO) — a big user of corn syrup — is down -0.7% and Archer Daniels Midland Co. (NYSE: ADM) is down about -1.1%. Another food processor, Smithfield Foods Inc. (NYSE: SFD) is down -3.63%, and cereal maker Post Holdings Inc. (NYSE: POST) is off -3.5%.

The USDA drought report is available here.

Paul Ausick