Grain prices soared again on Monday, sending soybean futures to an all-time high and corn futures to within 2% of their record top, as an expected cooling in Midwest temperatures failed to bring significant rains, further cutting hopes for US yields.

Chicago's best-traded December corn lot traded up the exchange limit of $0.40 at one point, to a contract high of $7.33 a bushel.

The July contract hit $7.86 ¾ a bushel, the highest since June 2011, when prices, on a spot contract basis, hit their record high of $7.99 ¾ a bushel.

July soybeans actually managed to exceed their record of the 2008 rally, hitting $16.79 ½ a bushel.

The best-traded soybean lot set a contract high, of $15.71 ¼ a bushel, while wheat - while not directly at risk from the US heatwave, with the winter crop harvest largely finished - was pulled up to a 10-month high of $8.44 ¾ a bushel.

Wrong place? 

The rises followed a weekend in which, while banishing the Midwest heatwave which has raised fears for huge crop losses, "oddly was not accompanied by heavy rainfall", Gail Martell at Martell Crop Projections said.

"Rains in Missouri south of the I70 highway, that's not where the production is," Jerry Gidel, feed grains analyst at Rice Dairy, said.

Weekly crop condition data later from the US Department of Agriculture are expected to show a drop of six points, to 42%, in the proportion of the domestic corn crop seen in "good" or "excellent" condition, the worst reading since 1988.

For soybeans, the proportion rated good or excellent is seen tumbling five points to 40%, also a 24-year low.

'Dialling in huge losses'

The weather updates sparked further falls in expectations for US yields this year, especially the result for corn, which has been undertaking the sensitive pollination period in far-from-ideal conditions.

"The erratic weather pattern continues to such an extent I've seen private estimates as low as 139 bushels per acre for corn," GrainAnalyst.com trader Matthew Pierce said.

"There are a few in the mid-140s bushels per acre with Lanworth in that category, with this a distinct possibility if rains do not start in the latter half of July."

US Commodities said: "The trade is now dialling in huge losses.  A sub-40 bushels-per-acre soybean yield is also widely discussed."

The USDA currently estimates the US corn yield at 166 bushels per acre and the soybean yield at 43.9 bushels per acre, although these figures are up for revision on Wednesday, when it releases its next monthly keynote Wasde crop report.

'No cover'

The high prices have sparked expectations of a sharp pull-back by consumers, which would, in loosening supplies somewhat, put the brakes on the rally.

However, ideas of this so-called demand destruction have been limited in part by the small degree of supply coverage that major buyers had coming into the rally - with expectations of a huge crop ahead, and official estimates of farmgate corn prices falling to $4.20-5.00 a bushel, stemming the incentive to buy ahead.

"End users had no cover," Mr Gidel said.

"There was meant to be plenty of the stuff around. And farmers had not been selling much."

Futures prices well below insurance rates gave growers little incentive to sell ahead, rather than wait for the prospect of crop damage.