Mon Jul 2, 2012
* New-crop corn climbs 3.2 pct on U.S. drought
* Dryness to curb supplies despite higher plantings
* Wheat at 9-1/2-month top, grain supply to tighten
* Nov. soy hits contract high as hot weather hurts
By Colin Packham and Naveen Thukral
SYDNEY/SINGAPORE, July 2 (Reuters) - Chicago new-crop corn jumped more than 3 percent on Monday to its highest since early September, with a worsening U.S. drought hurting the crop in its crucial pollination phase, while soybeans hit a contract high.
Wheat also jumped to a 9-1/2-month high, tracking corn higher on prospects of higher volumes being channeled into animal rations, given the tight global supply of corn.
"Hot, dry weather across the U.S. and the declining yield potential is driving the increase in corn today," said Luke Mathews, a commodities strategist at the Commonwealth Bank of Australia. "Wheat is being dragged along by the strength in corn, like soybeans too."
The Chicago Board of Trade most-active December corn contract rose 3.2 percent to $6.55 a bushel by 0320 GMT, the highest since September, while November soy added 0.7 percent to $14.38 a bushel. September wheat gained 1.2 percent to $7.66 a bushel.
U.S. December corn jumped almost 15 percent last week and September wheat gained more than 10 percent while November soybeans added nearly 4 percent.
Extreme heat and dryness will continue to deteriorate corn and soybean crops in much of the U.S. Midwest at least this week, with only minor amounts of rain seen for drought-plagued Indiana and Ohio, an agricultural meteorologist has predicted.
The mercury will again hit the triple digits, while no significant rainfall was expected elsewhere in the Midwest in the next few days.
Private crop forecasters have been reducing their estimates on U.S. corn crop output following the hot and dry weather.
Private analytical firm Informa Economics lowered its forecast of the U.S. 2012 corn yield to 154.9 bushels per acre from its June 15 projection of 163.4, trade sources said.
Investment bank Goldman Sachs in a research note on Friday it lowered its forecast of the U.S. corn yield to 153.5 bushels per acre from its previous forecast of 160, citing stressful weather.
As a result, large speculators bolstered their net long position in CBOT corn and options to the largest in five weeks and increased their net longs in CBOT soybeans to a seven-week high, regulatory data released on Friday showed.
The Commodities Futures Trading Commission's weekly commitments of traders report also showed that noncommercial traders, a category that includes hedge funds, slashed their net short position in CBOT wheat to the smallest in more than a year in the five trading days ended June 26.
U.S. farmers planted slightly more corn and far more soybeans than they originally planned, the government said on Friday in a report that failed to ease concerns over a Midwest drought that has jeopardized a bumper harvest.
According to the agriculture department's annual planting report, it has been 75 years since growers seeded so many acres with corn. They also planted the third-largest amount of soybeans on record.
Analysts said it was time to get concerned about soybeans even though gains in the oilseed market last week were not even one-third of those seen in the corn futures.
"We are more worried about soybeans as there is no real replacement for the protein while corn can be rationed and replaced with wheat or other grains," said one Melbourne-based analyst.
"Although there is still time for the soybean crop to get better weather, we are worried about the oilseed market as there are very tight supplies in Brazil and Argentina."
Prices at 0320 GMT
Contract Last Change Pct chg Two-day chg MA 30 RSI
CBOT wheat 766.00 8.75 +1.16% +1.16% 676.30 81
CBOT corn 655.00 20.25 +3.19% +3.19% 571.59 82
CBOT soy 1438.00 10.25 +0.72% +0.72% 1360.36 78
CBOT rice $14.60 $0.11 +0.72% +0.72% $14.46 43
WTI crude $83.96 -$1.00 -1.18% +8.07% $84.51 57
Currencies
Euro/dlr $1.262 -$0.006 -0.44% -0.33%
USD/AUD 1.022 -0.004 -0.41% -0.16%
Most active contracts
Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight
RSI 14, exponential
(Editing by Clarence Fernandez)
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