Tue Jun 26, 2012
* U.S. December corn extends gains with 2 pct jump
* November soy falls back after touching contract high
* USDA cuts weekly crop ratings for corn, soybeans
By Colin Packham
SYDNEY, June 26 (Reuters) - U.S. new-crop corn rose more than 2 percent on Tuesday to the highest since early November after corn quality deteriorated more than analysts expected, while wheat fell after touching a near nine-month high as traders locked in profits.
New-crop soybeans, which jumped to a contract high in early Asian trading, fell despite the U.S. Department of Agriculture cutting crop condition ratings for corn and soybeans to the lowest for this time of year since 1988, with traders pulling back in the oilseed as analysts expectations for crop damage were met.
"We are seeing some profit-taking across wheat and soybeans after some very strong gains in the last few sessions," said Victor Thianpiriya, an agricultural commodity analyst at ANZ.
"Corn is most sensitive to the heat in the U.S. Midwest at the moment, and while crop conditions in soybeans did come down, they weren't as bad as the figures for corn."
Chicago Board Of Trade December corn rose 2.57 percent to $6.09-1/4 a bushel, the highest since Nov. 9, while spot corn firmed 1.58 percent. November soybeans fell 0.25 percent to $14.22 a bushel, having opened higher in early Asian trading, while old-crop wheat fell 0.14 percent to $7.23-1/4 a bushel.
Corn shot up by the daily maximum 40 cents in the previous session, while wheat climbed nearly 8 percent in the market's most explosive session this year, with traders racing to revise down their production forecasts as an unexpectedly hot, dry spell this week damages crops that are already in their worst condition in 24 years.
The rising temperatures dried out fields and stressed both corn and soybean crops, which were further along in their development than usual due to a quick planting pace in the spring. That put corn at a particularly vulnerable development stage when the heat hit, and analysts said much of the damage to the crop is irreversible.
USDA's weekly crop ratings survey said that U.S. corn was rated 56 percent good to excellent as of Sunday, down 7 percentage points from a week earlier. Soybeans were 53 percent good to excellent compared with 56 percent a week earlier.
The average estimate in a Reuters poll of 12 analysts was a 61 percent good/excellent rating for corn and a 53 percent good/excellent rating for soybeans.
Corn ratings have fallen for three straight weeks, cutting expectations for a bumper crop this autumn.
Crop conditions were expected to further deteriorate this week, and analysts said crops in areas west of the Mississippi River also could suffer after holding up well throughout June.
There is little to no rain in the forecast in the Midwest for the next 10 days, while temperatures would rise later this week to the upper 80s F and mid-90s F (27 to 32 degrees Celsius), adding further stress to the corn and soybean crops, Global Weather Monitoring said on Monday.
Other forecasters said highs could reach or top 100 degrees.
With unfriendly crop weather forecast to continue, analysts are beginning to downgrade their predictions for corn in 2012/13. Macquarie Capital, in a report received on Monday, cut its forecast for the U.S. corn yield to 156.5 bushels an acre, significantly below USDA's current forecast of 166 bushels.
Soybeans, which are planted later in the year, still had time to recover from the recent dry spell, but rain was needed soon, analysts said.
Grains prices at 0640 GMT
Contract Last Change Pct chg Two-day chg MA 30 RSI
CBOT wheat 723.25 -1.00 -0.14% +10.08% 616.77 81
CBOT corn 609.25 15.25 +2.57% -7.48% 608.90 68
CBOT soy 1422.00 -3.50 -0.25% +15.85% 1161.72 70
CBOT rice $14.95 $0.01 +0.07% +2.08% $14.44 67
WTI crude $79.09 -$0.12 -0.15% -23.18% $98.16 29
Currencies
Euro/dlr $1.251 -$0.043 -3.32% -4.11%
USD/AUD 1.003 -0.034 -3.28% -3.31%
Most active contracts
Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight
RSI 14, exponential
(Reporting by Colin Packham; Editing by Chris Gallagher)
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