Many risk assets made a firm start to the week, boosted by hopes that European and US central banks will act to boost economic growth.

Both the European Central Bank and the Federal Reserve hold monetary policy meetings this week.

But grain and oilseed prices were especially firm, as hopes for a turn more benign in the Midwest faded, raising fears for further damage to corn and, particularly, soybeans, which are only now going through their most vulnerable stage of development, pod-filling.

Some areas did receive rains over the weekend, including parts of Illinois and Indiana, where crops are in particularly poor shape, and Iowa, the top growing state, where they have shown a later, but rapid, deterioration.

'Widely scattered rain'

However, official crop condition data later are nonetheless expected to show a further drop in crop condition ratings for the week to Sunday, of some 1-2 points in the "good" or "excellent" categories.

And hopes for further rain this week appear meagre, according to latest forecasts, particularly in more western areas.

"The forecast this week will continue to feature hot and dry areas over the western half of the country into the Rockies and the Plains," WxRisk.com said.

There will be "some areas of showers and thunderstorms over the next five days over the Dakotas and the Midwest.

"But this stuff activity will be widely scattered and for the most part the rainfall amounts will be under 1.0 inch," the weather service said.

Yield estimates

At FCStone, Rory Deverell said: "The week ahead is cooler but very little in the way of rainfall.

"Last week some drastic cuts in US yield forecasts. This week's weather outlook supports these pessimistic expectations."

Lanworth cut its forecast for the national corn yield to 122.0 bushels per acre, while the Doane crop tour put the Iowa result at 117 bushels per acre, down from a harvest result of 172 bushels per acre last year.

MDA EarthSat, after a tour of Iowa, Illinois, Indiana and Ohio, came up with a yield estimate of 118 bushels per acre, while Informa came in with a relatively upbeat figure of 134 bushels per acre.

'Makings of a total disaster'

"This has the makings of a total disaster in the US corn crop," Mike Mawdsley at broker Market 1 said.

While the US Department of Agriculture pegs the US corn crop at 13.0bn bushels, "production numbers as low as 10.0bn bushels are being discussed. And they could be right.

"If production was down near 10.0bn bushels, we don't need any exports next year. And someone will not get to use corn. It's not available at any price."

Price rises

Not that this ruled out further attempts to ration through higher prices.

Chicago corn for September rose 2.6% to $8.19 ¼ a bushel as of 09:10 UK time (03:10 Chicago time), earlier hitting $8.21 ¼ a bushel, coming within six cents from matching the record high for a spot contract set on July 20.

The better-traded December lot gained 2.8% to $8.15 ¼ a bushel, after managing its own contract high, of $8.17 ¼ a bushel.

Soybeans for August gained 1.6% to $17.10 ¾ a bushel, while the better traded November lot added 1.9% to $16.32 ½  a bushel.

Corn vs wheat

Wheat made headway too, boosted by increasing concerns for its stocks will hold up amid a large switch of grains use expected by corn consumers.

"With corn prices having soared by 55% since earlier this year, livestock farmers may consider switching to low-grade wheat for animal feed," Lynette Tan at Phillip Futures said.

"However, grains growers in major wheat exporting countries, such as Australia, had elected to turn away from wheat plantings this season amid sinking prices earlier this year and projections of ample global supplies.

"Existing wheat supplies are tight, and traders are speculating that drought in Russia's Black Sea region may result in the country blocking wheat exports again this year."

Argentine concern

Ideas over wheat supplies have hardly been improved by a caution by Argentina's farm ministry late on Friday that its crop was being tested, albeit in the early stages, by dryness.

Prospects for the wheat crop in Argentina, the sixth-ranked exporter, already look poor enough, with growers cutting sowings to a multi-decade low, a decline blamed on export restrictions which curtail returns from the crop.

Chicago wheat for September delivery added 2.2% to $9.17 ¾ a bushel.

Palm rises

Outside Chicago, palm oil gained a pull from soybeans, adding 1.4% to 2,967 ringgit a tonne in Kuala Lumpur for October delivery.

With Europe a major importer of the vegetable oil, its prices are also highly responsive to European economic sentiment.

And raw sugar gained a lift from positive market sentiment, plus continuing concerns over Brazilian and Indian weather.

New York's October contract added 0.4% to 22.62 cents a pound.