Thu Jun 28, 2012
* U.S. corn trades near 9-month top, up for 5th day
* Soy gains half pct as dry weather threatens U.S. crop
* Midwest crop fears persist despite forecast of some rain
* Wheat dips ahead of USDA stocks report on Friday
By Naveen Thukral
SINGAPORE, June 28 (Reuters) - Chicago new-crop corn rose for a fifth consecutive session on Thursday to around a nine-month top, while soybeans edged higher as hot and dry weather curbed yields in the U.S. Midwest, threatening to squeeze global supplies.
Wheat eased, snapping a four-session streak of rises, as the market took a breather ahead of a U.S. Department of Agriculture quarterly stocks report due on Friday.
"I think there is likely to be reduction in yield numbers which will ultimately lead to overall reduction in output," said Abah Ofon, an analyst at Standard Chartered Bank in Singapore.
"We are probably not going to return to the $4 a bushel level which was being suggested a few weeks ago with estimates of a record crop."
Chicago Board of Trade December corn, the first contract to reflect the new-crop harvest and the most active futures month, rose 0.2 percent to $6.34 per bushel by 0341 GMT.
The contract has surged more than 14 percent this week as the sizzling temperatures and a lack of rain are likely to take a heavy toll of the crop.
Analysts polled on Wednesday by Reuters estimate the U.S. corn yield will be 5.4 percent lower than the U.S. Agriculture Department forecast.
Much of the southern U.S. Corn Belt is suffering moderate to severe drought, with portions of Illinois, Indiana and Kentucky in a state of extreme drought. Only scattered showers are possible later this week, and those were forecast mostly in the northern part of the region.
Some midday weather models predicted a slightly better chance of rain in the next few days, but most weather forecasts continued to show dry conditions and above-normal temperatures.
CBOT November soy added 0.4 percent to $14.18 per bushel, while July wheat lost 0.7 percent to $7.27-1/4 a bushel.
The USDA, which earlier this week said the corn and soybean crops were in the worst condition since the historic drought year of 1988, will update its stocks and production forecasts in a report due on Friday.
"It remains to be seen how the acreage numbers pan out, which could take a little bit of sting out of the market," said Ofon. "If we do get slightly larger acreage for corn that might temper any extreme bullishness that one might see if the acreage numbers are left unchanged."
The U.S. government in March said farmers had planted the largest corn area since the 1930s and were expected to harvest a record crop this autumn, but a large harvest is unlikely now.
The higher corn prices have squeezed margins at U.S. ethanol plants, with Valero Energy Corp announcing that it was idling a biofuel refinery in Indiana, the second plant the company has shut until margins improve.
Prices at 0341 GMT
Contract Last Change Pct chg Two-day chg MA 30 RSI
CBOT wheat 746.75 -4.50 -0.60% +2.43% 652.26 80
CBOT corn 634.00 1.00 +0.16% +1.60% 561.86 69
CBOT soy 1418.00 6.00 +0.42% +0.34% 1347.67 65
CBOT rice $14.95 -$0.06 -0.40% -0.53% $14.50 63
WTI crude $80.60 $0.39 +0.49% +1.56% $85.11 41
Currencies
Euro/dlr $1.252 $0.003 +0.21% +0.10%
USD/AUD 1.012 0.006 +0.58% +1.15%
Most active contracts
Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight
RSI 14, exponential
(Reporting by Naveen Thukral)
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