Soybean futures jumped to their highest in two months, supporting corn and wheat prices too, as prospects for a US heatwave, and disappointing crop tour findings, dented expectations for ample supplies.
Soybean futures for November, the best-traded lot, soared more than 3% to $13.68 a bushel in Chicago at one point, the contract's highest since June 12.
The jump, reflected in a 4% jump in December soymeal futures to a contract high of $418.80 a short ton, came amid firming expectations for hot temperatures across the Midwest next week.
'Hottest Labor Day ever'
Forecasts show that a cold front over most of the Midwest is to prove short-lived, "which means the heat surges back into Nebraska, Iowa, South Dakota, Minnesota, North Dakota and Wisconsin by Sunday", David Tolleris at WxRisk.com said.
In the six-to-10 day outlook "the heat ridge/ dome shows no signs of weakening. None.
Grain and oilseed prices as of 12:30 Chicago time (18:30 UK time)
Chicago soybeans (November): $13.24 ½ a bushel, (+2.9%)
Chicago corn (December): $4.70 ½ a bushel, (+1.3%)
Chicago wheat (December): $6.46 a bushel, (+0.9%)
London wheat (November): £156.75 a tonne, (+0.6%)
Kansas wheat (December): $6.97 ½ a bushel, (+0.4%)
Paris wheat (November): E185.50 a tonne, (+0.1%)
Minneapolis wheat (December): $7.26 ½ a bushel, (unchanged)
"In fact all models expand the heat ridge/dome east across the Mississippi river for the first time since August 1," Mr Tolleris said.
"Over the western Corn Belt and central and upper Plains, it is quite possible that the weekend August 30-September 2 may be the hottest Labor Day weekend on record."
'Could be in trouble'
The warning comes at a time when findings of the Pro Farmer tour of Midwest crops has stoked doubts about prospects for the US soybean crop, showing disappointing pod count rates in many states, and cautioning over the delayed development of the crop too.
Such tardiness, a reflection of delayed spring sowings and cool temperatures for most of summer, has raised fears over the potential for damage to the crop from an early, or even timely, frost.
"The tour has left everyone encouraged with its estimates of the corn yield, but on the soybean yield, its findings have been less than impressive," Craig Hays at broker Linn Group told Agrimoney.com.
While the rains in the northern Corn Belt the last couple of days had "really helped" some crops, those that did not enjoy rainfall are "could be in trouble" if forecasts prove accurate, Mr Hays said.
Benson Quinn Commodities said: "The soybean crop is most vulnerable to next week's heat, especially after a mostly dry week this week, with crop in pod-setting and pod-fill stages."
The tour will release its full results after the close of trading today.
However, "there is a risk that the yield will clock in below 42 bushels per acre", Richard Feltes at RJ O'Brien said, below the 42.6 bushels per acre that the US Department of Agriculture has factored in, and raising the potential for a further squeeze on supplies.
Iowa-based broker US Commodities said: "If the yield drops 1 bushel per acre and demand remains constant, the carryout would drop to a tight 145m bushels.
"If we dropped 2 bushels per acre to 40.6 bushels per acre, the carryout would drop below the pipeline minimum."
Corn vs soybeans
The performance in soybeans lifted other crops too, although corn - feeling some weight from the Pro Farmer tour talk and from the completion of its sensitive pollination phase – rose a relatively light 1.2% to $4.70 a bushel as of 12:00 Chicago time.
Soybeans for November were up 2.9% at $13.24 ¼ a bushel, lifting the new crop soybean: corn ratio to an elevated 2.82: 1
On a March 2014 basis, Mr Feltes said that soybean futures have "moved to a new high against March 2014 corn futures, a clear signal that the soy market is on a mission to spur larger South American soybean area", encouraging farmers to plant the oilseed rather than the grain.
'Harvest well underway'
Wheat for December, meanwhile, added 1.0% to $6.46 ¾ a bushel for December delivery, following the row crops, as has been its tendency in recent sessions.
"Wheat has been a follower as large global production and large stocks limit gains," Benson Quinn Commodities said.
Furthermore, the fine weather means that at least "spring wheat harvest will be well underway after this weekend", weakening in particular Minneapolis spring wheat futures.
Minneapolis spring wheat for December eased 0.25 cents to $7.26 ¼ a bushel, with ideas of the elevated protein in hard red winter wheat also seen as a depressant on values, in weakening the call for higher protein supplies.
Still, demand ideas got a boost with Saudi Arabia appearing with a much-rumoured tender, for 660,000 tonnes of hard wheat, with a tender deadline of Saturday (August 23).
Many soft commodities perked up too, including raw sugar which for October delivery stood 1.2% higher at 16.47 cents a pound in late deals in New York, lifted by a recovery in the real, the currency of top producer and exporter Brazil.
The real rebounded 3% against the dollar at one point, falling back beneath R$2.36: $1. The real topped R$2.45 in the last session, its weakest since 2008.
A stronger real lifts values, in dollar terms, of Brazilian assets, and in sugar markets also acts to encourage sugar over ethanol.
Arabica coffee, of which Brazil is also the top producer and exporter, failed to post gains but at least slowed its descent, standing flat in late deals at 117.05 cents a pound for December delivery, after six successive sessions of losses.
'Situation is very worrying'
Indeed, the drop has been so severe, taking arabica coffee to a four-year low on a front contract basis, as falls in Brazilian prices have exacerbated the currency impact.
As of Thursday, domestic prices were down 2.8% this week, according to research group Cepea.
Brazil's Conselho Nacional do Café producers' group said that "this situation is very worrying, because it implies a greater imbalance between revenue and spending", and even worse financial prospects for farmers.
"The Brazilian coffee industry is dependent on imported fertilizers and agrochemicals, whose prices tend to rise with the weaker real."
Cotton nudges higher
Also in New York, cotton gained too, feeling some pull with the row crops, with which it competes for acreage and with South American sowing decisions being made.
Furthermore, the prospect of a weekend, and two days of no trading, tempted some investors with short positions to take profits on this week's losses, spurred by better-than-expected US crop condition data on Monday.
Cotton for December edged 0.2% higher to 84.31 cent a pound.