Corn extends run to five-year high as market frets over hot spell

PARIS/SYDNEY: Chicago corn extended gains on Monday to touch a five-year high as more hot weather forecast for the US Midwest failed to ease concern about stress to already fragile crops after a rain-plagued planting season.

Corn gave up some of its gains, however, as forecasts also predicted some rain in the Midwest this week and traders awaited a weekly US Department of Agriculture crop report for an update on corn conditions.

Wheat edged to a two-week high, drawing support from corn as well as downward revisions to world wheat supply in monthly USDA estimates published last week.

Soybeans slipped lower after touching a one-year high as traders weighed up risks for late-planted US soybeans in the face of hot weather.

The most active corn futures on the Chicago Board of Trade were up 0.5% at $4.61-3/4 a bushel at 1126 GMT, having earlier hit $4.64-3/4, the highest since June 2014 on a continuation chart.

But the most-active reference stayed below contract highs of last month on individual September and December delivery positions.

"It's too hot and the market is weighing up the very real prospect of supply issues," said National Australia Bank agribusiness economist Phin Ziebell.

After initially being seen as beneficial in drying out waterlogged fields and boosting plant growth, a recent warm, dry spell has fuelled worries that crops could be damaged during crucial pollination stages.

The USDA will issue its weekly crop progress report after Monday's market close in Chicago.

Traders largely shrugged off the USDA's forecast for UScorn production in its monthly supply and demand report on July 11, holding out for a follow-up survey of plantings by the agency after its previous acreage estimates were viewed as too high for corn and too low for soybeans.

"The market will continue to focus on weather maps until they get a better idea of what will be expected on next month's USDA report," brokerage Allendale said in a note.

The most active CBOT wheat futures ticked up 0.1% to $5.23-1/2 a bushel after earlier touching their highest in more than two weeks at $5.31-1/2.

The most active CBOT soybeans futures were down 0.2% at $9.29-1/4 a bushel, off a $9.36-1/2 session peak that was its highest since June 2018.

Weather risks for soybean crops in the Midwest were being weighed against demand concerns against the backdrop of a long-running US-Chinese trade dispute and pig disease in China.

China produced 24.7 million tonnes of pork in the first six months of 2019, down 5.5% from a year earlier, according to figures from the National Bureau of Statistics, amid a severe swine fever epidemic.