August 21, 2012 / 3:56 AM / 5 years ago

GRAINS-US new-crop soy hits contract high; corn, wheat firm

* New-crop soy rises for 3rd day
    * Corn at highest since Aug. 10, wheat firms
    * Pro Farmer pegs Ohio corn yield at 10-year low
    * Market needs higher prices to curb demand

 (Adds details, quotes)
    By Naveen Thukral
    SINGAPORE, Aug 21 (Reuters) - Chicago new-crop soybeans rose
to a contract high on Tuesday, gaining for a third consecutive
session, while corn climbed to its highest in more than a week
buoyed by expectations of poor yields after a devastating
drought in the U.S. grain belt.
    Soybean and corn futures have resumed their rally as
end-users snapped up grain cargoes after prices slid from record
highs in the last few weeks. This has fuelled the bullish
sentiment with analysts saying the market needs higher prices to
reduce demand as the worst drought in 56 years across the U.S.
grain belt curbs yields.
    "What is supportive for the market is the price break, which
we have had in the last couple of weeks, generated strong
physical demand," said Victor Thianpiriya, agricultural
commodity strategist at ANZ in Singapore.
    "The market is now being reminded that it has to do a much
bigger demand rationing job."
    Chicago Board of Trade new-crop November soybeans 
added 0.9 percent to $16.98-3/4 a bushel by 0300 GMT, a contract
high, while December corn rose 0.2 percent to $8.25-1/2 a
bushel, highest since Aug. 10. 
    
    The corn market is being supported by news from the Pro
Farmer Midwest Crop Tour which is projecting yields below what
the U.S. Department of Agriculture estimated earlier this month.
    The corn yield in Ohio was projected at the lowest level in
10 years after severe drought and hot temperatures sapped the
crop during its most vulnerable period of pollination, scouts on
the tour found. 
    The yield in the No. 8 corn growing U.S. state was estimated
at 110.5 bushels per acre (bpa), down sharply from the USDA's
estimate earlier this month of 126.0 bpa and the three-year tour
average of 160.5.
    In South Dakota, scouts came across field after field where
corn had been harvested for silage to feed on-farm cattle --
which means less corn being harvested for grain.
    The U.S. corn harvest got off to the fastest-ever start last
week as early planting last spring and a hot summer accelerated
crop development, the USDA said in a report. 
    Four percent of the crop was harvested as of Sunday,
according to the weekly crop progress report which was released
after the market closed on Monday.
    The USDA also said that the corn crop was rated 23 percent
good to excellent, unchanged from a week ago and in line with
market expectations for the drought-stricken crop.
    Crop conditions have stabilized during the past two weeks
after free falling throughout the summer due to the drought but
the crop still had the worst ratings since 1988.
    Soybeans were rated 31 percent good to excellent, up 1
percent from a week earlier due to spotty rainfall in some areas
east of the Mississippi River.
    Wheat futures were supported by continued speculation that
Russia could curb exports due to a poor crop. September wheat
 was up 0.4 percent at $8.83-1/4 per bushel.
    Russia's two main grain market analyst groups cut their 2012
grain and wheat harvest forecasts on Monday after the start of
harvesting campaigns in the Urals and Siberia showed weak crop
prospects. 
   
  Prices at  0300 GMT
  Contract        Last    Change  Pct chg  Two-day chg MA 30   RSI 
  CBOT wheat     906.50     3.75  +0.42%    -0.71%     874.63   57
  CBOT corn      825.50     1.75  +0.21%    +0.21%     769.43   64
  CBOT soy      1698.75    15.25  +0.91%    +4.14%    1587.17   64
  CBOT rice      $15.59   -$0.01  -0.03%    -2.07%     $15.49   54
  WTI crude      $95.99    $0.02  +0.02%    +2.82%     $89.18   78
  Currencies                                                
  Euro/dlr       $1.236   $0.007  +0.54%    +0.55%
  USD/AUD         1.048   -0.008  -0.73%    -0.90%
  Most active contracts
  Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight
  RSI 14, exponential
 
 (Additional reporting by Colin Packham in SYDNEY; Editing by
Himani Sarkar)

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