Tue Jul 3, 2012
* December corn rises 1.5 pct, hits highest since August
* Soy firms, spot-month trades near 4-year peak
* USDA slashes corn, soybean condition ratings
* Harsh weather this week may inflict more damage
By Naveen Thukral
SINGAPORE, July 3 (Reuters) - Chicago corn rose to a 10-month top on Tuesday, stretching gains into a third straight session, while soybeans surged to their highest in almost four years as a U.S. report cut crop condition ratings in a fresh blow to world corn and soy supplies.
Wheat also jumped to a 10-month high, buoyed by lower supplies from the Black Sea region and tracking corn's rally.
Extreme hot and dry weather has taken a toll on the U.S. corn and soybean crops with the U.S. Department of Agriculture (USDA) on Monday slashing its condition rating for U.S. corn to 48 percent good-to-excellent, down 8 percentage points from a week earlier. It pegged the soybean crop at 45 percent good-to-excellent, compared with 53 percent a week ago.
"The market is on fire, it is just rising higher," said Abah Ofon, an analyst at Standard Chartered Bank in Singapore.
"The yields are going to be decimated if this hot weather continues in the U.S. and the huge crops that we are looking for are not going to be achieved."
The Chicago Board of Trade December corn gained 1.5 percent to $6.65-3/4 a bushel by 0259 GMT, after rising to $6.72 a bushel, the highest since end-August.
The most-active November soy jumped to a contract high of $14.63 a bushel, while the spot month rose to $15.53-3/4 a bushel, the highest since July 2008.
September wheat gained 0.9 percent to $7.79-1/4 a bushel. On a continuation chart, wheat climbed to $7.61 per bushel, highest since August last year.
The latest corn rating is 29 percentage points below the USDA's initial forecast early in the crop season and the soybean rating is 11 percentage points below USDA's initial forecast.
Cropcast, a division of MDA EarthSat Weather, pegged the 2012 U.S. corn yield at 150.6 bushels per acre, down from its previous forecast for 153.3 bushels. It projected domestic corn production at 13.179 billion bushels, down from its prior estimate of 13.503 billion.
Cropcast forecast U.S. soybean yield at 40.0 bushels an acre, below its previous projection of 40.6 bushels, and pegged soybean production at 2.962 billion bushels, below its previous 3.014 billion bushel outlook.
Forecasts called for slightly wetter weather in parts of the U.S. Midwest, but much of the region will still face relentless heat and dryness, trimming corn and soybean crop prospects, meteorologists said.
The 6- to 10-day projection was drier for the southwestern Corn Belt and the northern Delta, with no changes to earlier scorching temperature forecasts.
Soybean prices are expected to be supported by a confirmation that an unnamed buyer - widely believed to be China - had purchased nearly 1.2 million tonnes of soybeans from the United States, the fifth largest single-day U.S. soy export sale on record.
Commodity funds bought an estimated net 17,000 Chicago Board of Trade corn futures contracts on Monday, trade sources said. They bought 3,000 wheat and bought 6,000 soybeans.
For wheat, the bullish news came from the International Grains Council which cut its forecast for global wheat production in 2012/13 as the outlook for the crop in key exporter Russia deteriorated.
World wheat production was cut to 665 million tonnes from a previous forecast of 671 million and now stands well below the prior season's 695 million.
Prices at 0259 GMT
Contract Last Change Pct chg Two-day chg MA 30 RSI
CBOT wheat 779.25 6.75 +0.87% +1.56% 679.93 84
CBOT corn 665.75 10.00 +1.52% +1.64% 576.28 83
CBOT soy 1449.50 11.50 +0.80% +0.03% 1364.68 82
CBOT rice $14.67 -$0.01 -0.07% +0.93% $14.47 48
WTI crude $84.08 $0.33 +0.39% -1.04% $84.22 57
Currencies
Euro/dlr $1.259 -$0.008 -0.63% -0.52%
USD/AUD 1.026 0.000 +0.05% +0.30%
Most active contracts
Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight
RSI 14, exponential
(Editing by Himani Sarkar)
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