Mon Jun 25, 2012
* U.S. December corn jumps to highest since Feb. 8
* Wheat up 2 pct, November soybeans at contract high
* Dryness continues to stress U.S. corn and soybeans
* Rains forecast for China's drought-hit corn areas
By Naveen Thukral
SINGAPORE, June 25 (Reuters) - Chicago new-crop December corn jumped more than 4 percent on Monday to its highest since early February, while November soybeans climbed to a contract high as dry weather in parts of the U.S. Midwest threatened crops.
The front-month wheat gained more than 2 percent to a one-month top, tracking gains in corn and buoyed by dryness hurting yields in the Black Sea region.
"It is very much a weather-related rally in this session," said Luke Mathews, commodities strategist at the Commonwealth Bank of Australia in Sydney. "Corn and soybeans are drawing support from dryness in the eastern corn-belt in the United States and wheat is drawing support from dryness in Ukraine and Russia."
Chicago Board of Trade December corn rose 4.2 percent to $5.77-1/4 per bushel by 0332 GMT, while November soy climbed 3 percent to $14.17-1/4 per bushel. July wheat added 2.2 percent to $6.88-1/2 per bushel, the highest since May 22 on a continuation chart.
Corn and soybean crops in the U.S. Midwest have endured dry, hot conditions at a time when the market is relying on a bumper harvest to rebuild tight stocks. The U.S. corn stockpile is projected to fall to a 16-year low by Aug. 31.
The USDA has projected a record-high U.S. corn yield for 2012 of 166 bushels per acre, but dry conditions in the southern and eastern portions of the Corn Belt have raised doubts.
Condition ratings for the U.S. corn crop have shed 14 percentage points from good-to-excellent since the season began. The market is prepared for another 2 to 3 point drop in the U.S. Department of Agriculture's (USDA) weekly crop progress report later on Monday.
Dry weather continues to stress corn and soybean crops in the southern U.S. Midwest, while timely rainfall has boosted crop growth and development in the northwest, an agricultural meteorologist said on Friday.
Cropcast, a division of MDA EarthSat Weather trimmed its estimate for U.S. corn production last week to 13.971 billion bushels, below the USDA's current forecast for 14.790 billion.
Still, the market bears continue to focus on waning U.S. corn export sales amid stiff competition from cheaper South American supplies and a slowdown in U.S. ethanol output due to high corn prices, falling energy prices and poor ethanol plant profit margins.
There are forecasts of rainfall this week in drought-hit corn producing regions of China, the world's second-largest consumer of the grain.
Rains were forecast from June 25-30 in China's northern areas, where farmers have completed corn planting. The areas near Yellow and Huai rivers would have as much as 70 mm of rains, which would help ease drought in these areas, according to the National Meteorological Center.
China is emerging as a leading corn importer as domestic production fails to keep pace with expanding demand from the animal feed sector. China Dalian corn rose to its highest since early May.
Worries about weather in the U.S. Midwest have supported soybeans as well. Traders cited fears that dry weather would impede the planting of the last of the U.S. soybean crop, including so-called "double-crop" soybeans that are planted on recently harvested winter wheat fields.
Wheat prices advanced on short-covering following downgraded outlooks for crops in several key exporting countries including Russia. Dealers continued to keep a close watch on hot weather in the Black Sea region after forecasters cut crop estimates for major exporters Russia and Ukraine.
Prices at 0332 GMT
Contract Last Change Pct chg Two-day chg MA 30 RSI
CBOT wheat 688.50 15.25 +2.27% +2.27% 647.23 76
CBOT corn 577.25 23.25 +4.20% +4.20% 559.35 58
CBOT soy 1417.25 41.75 +3.04% +3.04% 1346.18 72
CBOT rice $14.87 $0.15 +0.98% +2.76% $14.35 62
WTI crude $80.05 $0.29 +0.36% +2.37% $86.52 33
Currencies
Euro/dlr $1.253 $0.006 +0.46% -0.96%
USD/AUD 1.003 0.017 +1.71% +0.34%
Most active contracts
Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight
RSI 14, exponential
(Additional reporting by Colin Packham In SYDNEY and Niu Shuping in BEIJING; Editing by Chris Lewis)
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