US grains soar

US grains rose for a third straight day on Tuesday, with benchmark December corn notching a contract high as crop conditions deteriorated and sparse rains fell on the dryer soils leading to more concerns. The waning crop prospects led weather forecaster Commodity Weather Group on Tuesday to lower its estimate for US 2011 corn production to 12.485 billion bushels from its previous outlook for 12.621 billion and below the US government's current outlook for 12.914 billion bushels.
A second straight day of gains in the stock market, a weaker dollar and higher crude oil contributed support. Wheat rose for the 10th day of the past 11, hovering near two-month highs on concerns over waning global supplies of high-quality wheat. Low US spring wheat yields, drought in the US Plains hard red winter wheat belt and threats to Germany's harvest due to excessive rain kept the wheat market on the boil.
Soybeans climbed to a one-month high on declining US soya conditions and concerns over dry weather as the crop goes through its weather-sensitive pod-setting stage. CBOT wheat for September delivery was up 21-3/4 cents at $7.57-1/4, new-crop December corn was up 9 cents at $7.43-1/2 and new-crop November soyabeans were up 12 cents at $13.97-1/4.
The new contract high for December corn is $7.44 per bushel, up from the previous high of $7.36-1/2 per bushel set on Monday. US pod-setting soya and filling corn will receive some rainfall at midweek but more is needed soon and this week's rain will miss some of the driest crop areas, an agricultural meteorologist said on Tuesday. "There isn't enough rain where it's needed, that and the crop conditions continue to decline ... those are the two main drivers of the market right now," said Mario Balletto, analyst for Citigroup.
The US Department of Agriculture (USDA) on Monday reported a decline in condition ratings for US corn and soyabeans. The drop in ratings was more than traders had expected. Minneapolis Grain Exchange spring wheat futures for September delivery were up 7 cents at $9.50-1/4 per bushel. European milling wheat futures hit a new two-month high, buoyed by rising Russian prices, concerns about US crops and a threat of quality damage in Germany. Benchmark November up 4.75 euros per tonne or 2.34 percent at 208 euros per tonne after hitting a two-month high of 208.25 earlier.