Soybean futures climbed to their highest level in more than six months in Chicago and corn also advanced on concern the effects of hot July weather in the largest U.S. growing states will reduce harvests.
Soybeans for November delivery rose as much as 1.2 percent to $14.41 a bushel on the Chicago Board of Trade, the highest since Feb. 11, before trading at $14.3925 at 11:40 Paris time. December-delivery corn added 1.2 percent to $7.76 a bushel.
Iowa and Illinois, the biggest corn- and soybean-growing states, had their hottest July since 1955, according to state climatology departments. Parts of Iowa, Illinois, Minnesota and Indiana received a quarter of normal rainfall this month, according to the National Weather Service.
"While improved weather in September could still rescue the soybean crop, a continuation of current conditions is likely to leave yields lower year-on-year," Morgan Stanley analysts Hussein Allidina, Bennett Meier and Tian Yu said in a report today. "Average soybean pod counts were down in every state but Ohio on this year’s crop tour."
World soybean production will drop 2.5 percent from a year earlier to 257.5 million metric tons in the 2011-2012 season, below demand estimated at 262.3 million tons and draining stocks, the U.S. Department of Agriculture forecast Aug. 11.
The U.S., the largest soybean grower and exporter, may produce 3.025 billion bushels of the oilseed, 1 percent less than the USDA forecast, Rabobank International said in a report issued Aug. 26, when it correctly predicted that the risk of yield losses could push the price above $14 a bushel. A metric ton of soybeans equals about 36.7 bushels.
Corn Gains
December-delivery corn gained as much as 1.6 percent to $7.79 a bushel, the highest level for a most-active contract in Chicago since June 9.
U.S. farmers will probably collect 12.484 billion bushels of corn this year, less than the 12.914 billion bushel forecast by the USDA on Aug. 11, according to an estimate by the Professional Farmers of America. A metric ton of corn is about 39.4 bushels.
"The majority of damage to this year’s corn crop has already been done," Allidina, Meier and Yu at Morgan Stanley said. "We observed evidence of poor pollination and underdeveloped corn ears in nearly every field we sampled."
December-delivery wheat advanced as much as 1.1 percent to $8.055 a bushel in Chicago, the highest level for a most-active contract since May 31, before trading at $8.0025 a bushel. Milling wheat for November delivery traded on NYSE Liffe in Paris advanced 1.8 percent to 214 euros ($310.60) a ton.
Cotton for December delivery added 0.3 percent to $1.0465 a pound on ICE Futures U.S
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