PRINTABLE VERSION   EMAIL TO A FRIEND   RSS FEEDS 17:06 UK, 27th Jun 2012, by Agrimoney.com
Corn soars anew as US braces for 100-degree heat

Corn futures rallied strongly for a third day as major US producing areas prepared for 100-degree Fahrenheit heat, stealing limelight from the prospect of long-awaited data on Friday.

Chicago's best-traded December contract hit a fresh nine-month high of $6.56 a bushel at one point, a gain of 5% on the day, and taking the lot's headway in three sessions above 18% - and to more than $1 a bushel too.

The rise followed a turn for the drier in the Midwest weather outlook - with the US GFS model aligning with its European peer, which has consistently foreseen less rain ahead - albeit with some temperature forecasts edged lower.

"The US weather model came closer to the European one, and we were away," Jerry Gidel at broker Rice Dairy said.

'Forecast is extremely hot'

Temperatures in many areas, including Chicago, are still expected to reach 100 degrees Fahrenheit tomorrow as an "expansive heat dome" covers areas from Colorado in the west to the Appalachian Mountains in the east, and south to the Gulf of Mexico, Gail Martell at Martell Crop Projections said.

Crop prices 18:00 UK time (12:00 Chicago time)  on Wednesday

Chicago corn (December):$6.36 a bushel, +2.0%

London wheat, (November): £170.50 a tonne, (+1.6%)

Paris wheat, (November): E229.25 a tonne, +1.4%

Chicago wheat, (September contract):  $7.56 a bushel, +1.2%

Kansas wheat (September): $7.59 a bushel, +1.0%

Chicago soybeans, (November): $14.26 a bushel, +0.9%
"The forecast is extremely hot in the central US. The heart of the US corn belt is still expected to sizzle," Ms Martell said, flagging 100-degree heat in parts of Indiana besides Illinois, and also into Plains states such as Missouri and Kansas.

"This is very detrimental with existing dry field conditions," and with crops in the early stages of the vulnerable pollination period.

"Bad crop ratings will grow worse," she said.

'Acreage report who cares?'

The weather outlook also overshadowed much-anticipated crop inventory and sowings reports due from the US Department of Agriculture on Friday, the prospect of which had instilled some caution into investor thinking.

"The acreage report who cares?" Mr Gidel asked, noting the potential for yield revisions to swamp the impact of any changes to planting area estimates.

"For soybeans, if you have a rise in acres of some 1m-1.5m acres, that is only another 50m bushels in our pocket."

Soybean futures too overturned early losses to see the November contract at one point post a fresh contract high of $14.39 a bushel, a gain of 1.9%.

Chicacgo wheat futures for September set an eight-month high of $7.63 a bushel , while benchmark November lots in Paris and London lots hit their highest for more than a year.

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