Australia & New Zealand Bank joined commentators forecasting that soybean futures will outperform those in corn, saying that the oilseed's rally could have more than a further $1 a bushel to run.

Even after a rise of some 16% since the start of June, Chicago's November soybean contract "looks undervalued", ANZ analyst Victor Thianpiriya said.

The gains are a little over half those notched up by new crop December corn, which has shown particular strength thanks to the hot and dry weather reducing hopes for US harvests.

The United Nations Food and Agriculture Organization on Thursday slashed 25m tonnes from its forecast for the US corn harvest.

However, the condition of the US soybean crop, the world's biggest, has fallen notably too, to its worst since the drought year of 1988, at a time when prospects for global supplies had already been weakened by drought-hit South American harvests.

'Clear potential'

"The soybean market already had very strong fundamentals prior to the current weather concern," Mr Thianpiriya said.

"With the rapid deterioration in the condition of the US soybean crop in recent weeks, there is a clear potential for supplies to tighten further over the next nine months."

The ratio of November soybeans to December corn will recover potentially to its mid-June high of 2.60 from its current level of 2.19.

"We expect the ratio of new crop soybean to corn prices to appreciate in the near term. Soybean prices have room to gain on corn," Mr Thianpiriya said.

He forecast that the November soybean lot could hit $16.00 a bushel within the next months, before the prospect of harvest begins to tell.

'Particularly precarious'

The comments echo those from commentators such as Goldman Sachs and Teucrium Trading over the case for soybeans to improve their price relative to corn.

And separately on Thursday, Commerzbank analysts said the supply position "is particularly precarious for soybeans", given the weak South American harvests, and expectations of record Chinese demand.

"It is not surprising that soybeans are trading at a price of only $1 a bushel below the record level of $16.60 per bushel reported four years ago," on a spot contract basis, the bank said.

'Cautious in selling corn'

However, unlike Goldman, ANZ did not recommend going short in December corn futures besides buying into November soybeans.

"We are cautious in selling corn futures… as the current rally in grains could easily have further to run," Mr Thianpiriya said.

Some investors have also trod carefully on buying into soybeans given the near-record net long position already held by speculators in Chicago futures and options, signalling potentially a reluctance to pile on more.

Speculators' net long position in corn, at some 109,000 lots, is a fraction of historic highs.