August 13, 2010

US corn, soy futures rise amid heat wave

US corn futures rose the most in almost two weeks and soy gained on speculation that the recent Midwest heat wave will mean smaller production than the record crops predicted by the government.

According to analysts, August has gotten off to the second-warmest start since 1960, adding that about 25% of the US soy-growing area would not get enough rain for proper plant development over the next two weeks. The dryness could harm a third of the Midwest should rain miss sections of Illinois this weekend, as expected.

Corn futures for December delivery rose 12.5 cents, or 3%, to US$4.235 a bushel at 11:24 a.m. on the CBOT. A close at that price would be the biggest gain since July 30. The most-active contract reached a 13-month high of US$4.39 on August 4 after Russia halted grain exports for the rest of the year due to drought.

Soy futures for November delivery climbed 13.75 cents, or 1.4%, to US$10.2925 a bushel on the CBOT, after dropping 1.9% the previous two days. On August 5, the oilseed reached a seven-month high at US$10.49.

Farmers will harvest 13.365 billion bushels (339.5 million tonnes) of corn this year, up from a record 13.11 billion tonnes last year and more than the 13.245 billion bushels forecast last month, the USDA said in its estimate for the crop.

The soy crop will total 3.433 billion bushels, up from a record 3.359 billion in 2009, USDA said. The average estimate of analysts was 3.36 billion. A month ago, the USDA predicted a crop of 3.345 billion.

Corn is the biggest US crop, valued at US$48.6 billion in 2009, followed by soy at US$31.8 billion, government figures show.