Mon Jul 30, 2012
* Soy, corn rise over 2 pct, build on Friday's gains
* Drought, heat to shrivel U.S. soybean, corn crops
* Soy in key phase, some corn damage beyond repair
* Market eyes crop deterioration in USDA report
By Naveen Thukral
SINGAPORE, July 30 (Reuters) - Chicago soybeans jumped to a one-week top on Monday, while new-crop corn rose to a contract high as the worst drought in five decades continued to threaten crop yields across the U.S. grain belt with little relief expected this week.
Wheat rose 1.7 percent to its highest since Tuesday, buoyed by the rally in corn and production concerns in South America and the Black Sea region.
"There is no weather relief this week as there are no rains in central and southeastern corn belt until the weekend and temperatures will remain above average," said Victor Thianpiriya, agricultural commodity strategist at ANZ.
"The market needs to ration demand."
Chicago Board of Trade new-crop December corn rose 2.6 percent to $8.14 a bushel by 0534 GMT, after touching a high of $8.14-1/2 a bushel, a contract high. Actively traded November soy gained 2.3 percent to $16.37-3/4 a bushel, the highest since July 23.
September wheat added 1.7 percent to $9.13 a bushel.
Soybeans, along with corn and wheat, posted their first weekly decline last week since the worst drought in 56 years started boosting prices about a month and a half ago, spurring corn and soybean futures to record highs.
The agricultural markets have resumed their rally since Friday as reports of crop damage poured in.
The U.S. drought has left corn plants withered and dying, and crop yields in the largest producing states will be much lower than experts have forecast, scouts said on Friday as they completed a U.S. Midwest crop tour.
Crop forecasters Lanworth, a unit of Thomson Reuters, and Informa slashed their yield estimates for both corn and soybeans on Friday, illustrating the effects of the drought.
More than half of the contiguous United States is experiencing drought, which is centred in the Midwest that produces 75 percent of the corn and soybeans in the world's largest grain exporting nation.
While soybeans are in their crucial yield-determining phase, the bulk of the corn crop is past the phase of pollination with rain at this stage of development unlikely to make much difference.
Price direction for CBOT grains could come from the weekly crop progress report from the U.S. Department of Agriculture later on Monday, which analysts are expecting will show a marginal downgrade in the corn and soybean crops.
There were expectations for the USDA report to show the soybean crop in good-to-excellent condition to fall 1 to 2 percentage points from the previous week's 31 percent. Ratings have dropped four straight weeks as the drought intensified.
The corn crop, along with soybeans, are rated to be in the worst condition at this time of the year in nearly 25 years due to the onslaught from the drought.
Traders will also be watching how much of the demand for corn has been dented by the surge in prices, particular from the ethanol sector where production has begun to decline.
The wheat market has been largely driven by the rally in corn futures but there are growing concerns over supplies from the Black Sea region and South America.
Dry weather in some wheat-growing areas in Argentina has begun to affect the 2012/13 crop, which farmers have yet to finish planting, the farm ministry said on Friday in its weekly crop progress report.
The country is the world's No. 6 wheat exporter and the top supplier to neighbouring Brazil. The government expects farmers to seed 3.8 million hectares with the grain this season, down from 4.6 million hectares last season.
Prices at 0534 GMT
Contract Last Change Pct chg Two-day chg MA 30 RSI
CBOT wheat 913.00 15.00 +1.67% +1.67% 845.36 65
CBOT corn 814.00 20.75 +2.62% +2.62% 727.14 67
CBOT soy 1637.75 36.00 +2.25% +2.25% 1543.98 62
CBOT rice $15.71 $0.11 +0.71% +0.71% $15.22 64
WTI crude $90.55 $0.42 +0.47% +1.30% $85.59 62
Currencies
Euro/dlr $1.229 $0.017 +1.39% +1.12%
USD/AUD 1.046 0.010 +0.99% +0.88%
Most active contracts
Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight
RSI 14, exponential
(Editing by Himani Sarkar)
* Soy, corn rise over 2 pct, build on Friday's gains
* Drought, heat to shrivel U.S. soybean, corn crops
* Soy in key phase, some corn damage beyond repair
* Market eyes crop deterioration in USDA report
By Naveen Thukral
SINGAPORE, July 30 (Reuters) - Chicago soybeans jumped to a one-week top on Monday, while new-crop corn rose to a contract high as the worst drought in five decades continued to threaten crop yields across the U.S. grain belt with little relief expected this week.
Wheat rose 1.7 percent to its highest since Tuesday, buoyed by the rally in corn and production concerns in South America and the Black Sea region.
"There is no weather relief this week as there are no rains in central and southeastern corn belt until the weekend and temperatures will remain above average," said Victor Thianpiriya, agricultural commodity strategist at ANZ.
"The market needs to ration demand."
Chicago Board of Trade new-crop December corn rose 2.6 percent to $8.14 a bushel by 0534 GMT, after touching a high of $8.14-1/2 a bushel, a contract high. Actively traded November soy gained 2.3 percent to $16.37-3/4 a bushel, the highest since July 23.
September wheat added 1.7 percent to $9.13 a bushel.
Soybeans, along with corn and wheat, posted their first weekly decline last week since the worst drought in 56 years started boosting prices about a month and a half ago, spurring corn and soybean futures to record highs.
The agricultural markets have resumed their rally since Friday as reports of crop damage poured in.
The U.S. drought has left corn plants withered and dying, and crop yields in the largest producing states will be much lower than experts have forecast, scouts said on Friday as they completed a U.S. Midwest crop tour.
Crop forecasters Lanworth, a unit of Thomson Reuters, and Informa slashed their yield estimates for both corn and soybeans on Friday, illustrating the effects of the drought.
More than half of the contiguous United States is experiencing drought, which is centred in the Midwest that produces 75 percent of the corn and soybeans in the world's largest grain exporting nation.
While soybeans are in their crucial yield-determining phase, the bulk of the corn crop is past the phase of pollination with rain at this stage of development unlikely to make much difference.
Price direction for CBOT grains could come from the weekly crop progress report from the U.S. Department of Agriculture later on Monday, which analysts are expecting will show a marginal downgrade in the corn and soybean crops.
There were expectations for the USDA report to show the soybean crop in good-to-excellent condition to fall 1 to 2 percentage points from the previous week's 31 percent. Ratings have dropped four straight weeks as the drought intensified.
The corn crop, along with soybeans, are rated to be in the worst condition at this time of the year in nearly 25 years due to the onslaught from the drought.
Traders will also be watching how much of the demand for corn has been dented by the surge in prices, particular from the ethanol sector where production has begun to decline.
The wheat market has been largely driven by the rally in corn futures but there are growing concerns over supplies from the Black Sea region and South America.
Dry weather in some wheat-growing areas in Argentina has begun to affect the 2012/13 crop, which farmers have yet to finish planting, the farm ministry said on Friday in its weekly crop progress report.
The country is the world's No. 6 wheat exporter and the top supplier to neighbouring Brazil. The government expects farmers to seed 3.8 million hectares with the grain this season, down from 4.6 million hectares last season.
Prices at 0534 GMT
Contract Last Change Pct chg Two-day chg MA 30 RSI
CBOT wheat 913.00 15.00 +1.67% +1.67% 845.36 65
CBOT corn 814.00 20.75 +2.62% +2.62% 727.14 67
CBOT soy 1637.75 36.00 +2.25% +2.25% 1543.98 62
CBOT rice $15.71 $0.11 +0.71% +0.71% $15.22 64
WTI crude $90.55 $0.42 +0.47% +1.30% $85.59 62
Currencies
Euro/dlr $1.229 $0.017 +1.39% +1.12%
USD/AUD 1.046 0.010 +0.99% +0.88%
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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