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GRAINS-U.S. grains jump as drought offsets bigger acreage
July 2, 2012 / 1:03 AM / 5 years ago

GRAINS-U.S. grains jump as drought offsets bigger acreage

* New-crop corn climbs 4 pct on weather concerns
    * Weather damage to reduce harvest despite increased
plantings
    * Wheat rises on the back of corn
    * Soybeans firm as weather likely to reduce yield

 (Updates prices, includes quote, adds details)
    By Colin Packham
    SYDNEY, July 2 (Reuters) - U.S. new-crop corn rose 4 percent
on Monday to the highest level since early September, boosted by
persistent worries about scorching weather damaging crops across
the Midwest, while wheat hit a nine-and-a-half month high.
    Chicago Board of Trade December corn jumped 4.02
percent to $6.61 a bushel, the highest since September 12, 2011.
New-crop corn finished up 15 percent last week. 
    Spot corn firmed 3.12 percent to $6.93 a bushel after
climbing 3.14 percent on Friday.
    "Hot, dry weather across the U.S. and the declining yield
potential is driving the increase in corn today," Luke Matthews,
commodities strategist at the Commonwealth Bank of Australia,
said. "Wheat is being dragged along by the strength in corn,
like soybeans too, but beans are also under pressure from the
hot, dry conditions."
    September wheat rose 1.49 percent in early trading to
$7.72-3/4 a bushel, the highest since September 16. The climb on
Monday comes after September wheat firmed 1.51 percent in the
previous session. 
    New-crop November soybeans rose 1.87 percent to
$14.52-1/2 a bushel after finishing up 1.73 percent on Friday. 
    
    
    WEATHER OFFSETS LARGER ACREAGE
    The U.S. Department of Agriculture in its annual acreage
report on Friday said farmers planted more corn and soybeans
than traders had expected, with the corn area the largest since
1937 and soy the third highest ever.
    But the harvests were in doubt as drought during corn's
pollination stage was widely viewed likely to reduce yields,
with the government earlier this week saying conditions of the
corn and soy were the worst since the historic drought year of
1988.
    USDA said U.S. farmers planted 3 percent more soybeans than
they initially planned and slightly more corn, but in a tacit
recognition of the drought, USDA said 8 percent of corn land
would not be harvested, up 1 percentage point from a projection
made two weeks ago. 
    
    Rains moved through the top two corn and soy producing
states of Iowa and Illinois, respectively, on Friday, but
meteorologists forecast mostly hot and dry weather for at least
another week. 
    Bids for soybeans in the export markets at the U.S. Gulf
Coast rose to the highest level since February amid tight
supplies in the pipeline, traders said
    
  Grains prices at  0020 GMT
  Contract        Last    Change  Pct chg  Two-day chg MA 30   RSI 
  CBOT wheat     768.50    11.25  +1.49%   +16.97%     618.28   82
  CBOT corn      660.25    25.50  +4.02%    +0.27%     610.60   82
  CBOT soy      1454.50    26.75  +1.87%   +18.49%    1162.80   80
  CBOT rice      $14.69    $0.20  +1.35%    +0.27%     $14.44   43
  WTI crude      $84.39   -$0.57  -0.67%   -18.04%     $98.33   58
  Currencies                                                
  Euro/dlr       $1.264  -$0.031  -2.36%    -3.16%
  USD/AUD         1.023   -0.014  -1.34%    -1.37%
  Most active contracts
  Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight
  RSI 14, exponential
 
    

 (Editing by Ed Davies)

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