July 2, 2012 / 3:49 AM / 5 years ago

GRAINS-US corn jumps to 9-1/2 month top, soy hits contract high

5 Min Read

* 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

 (Recasts with quotes, details)
    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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