The drought of 2012 continues driving corn and soybean prices higher. Soybeans rallied nearly 3 percent on Tuesday hitting a new peak and closing the day’s trade at $17.53 per bushel. Tuesday’s trade also pushed soybean meal cash price to $576.10 per ton.

Corn rose nearly 2 percent to close at $8.43 per bushel on evidence of damaged crops amid the worst drought in half a century and a need for rationing through even higher prices.

Corn price around $8.50 may be the new normal, says Elwynn Taylor, Iowa State University agricultural meteorologist. Taylor sees the U.S. corn yield around 130 bushels per acre “and prices of corn in the mid-$8 range fit that scenario.”

Weather patterns are among the chief causes of the 2012 drought and play a significant role in determining how long corn prices remain in the $8 range. “The drought was the result of the second strongest La Niña in the observation period of 120 years,” Taylor says. "The La Niña is about gone and the drought is showing the sign of maturity in the West. The current drought is diminishing in the South, Southwest, East and eastern Corn Belt.”

“We think there will be some persistence of drought into 2013, but short of calling it a continued drought,” Taylor says. “If it should shift to El Niño, the drought will be over.”

El Niño is a disruption of the ocean-atmosphere system in the tropical Pacific having important consequences for weather and climate around the globe, according to the National Oceanic and Atmospheric Administration (NOAA). El Niño is characterized by unusually warm temperatures, while La Niña by unusually cool temperatures in the equatorial Pacific.

View a NOAA video on detection, understanding and prediction of El Niño and La Niña.