Corn, soy futures rally on U.S. harvest concerns; wheat strong
By Mark Weinraub
CHICAGO, Aug 23 (Reuters) - U.S. corn futures surged 4.7% to a 7-1/2-week high on Tuesday as a report on crop conditions and a tour of key growing areas in the Midwest raised concerns that the size of the U.S. harvest will fall below expectations.
The potential for reduced yields in the fall also sparked a rally in the soybean market, traders said.
The strength in corn and soybeans spilled over to wheat futures, which were on track for their third day of gains.
"Corn is leading the charge this morning on the one-two punch of an ugly start to the Pro Farmer crop tour, followed by a surprise ratings cut yesterday afternoon," Matt Zeller, director of market information at brokerage StoneX, said in a note to clients.
South Dakota corn yields were projected at 118.45 bushels per acre, the Pro Farmer Midwest Crop Tour said on Monday, the worst on the tour since 2012.
The tour also found that Ohio corn yield prospects and soybean pod counts are lower than last year.
At 11:03 a.m. CDT (1603 GMT), Chicago Board of Trade December corn futures CZ2 were up 29 cents at $6.58 a bushel. Prices peaked at $6.62, the highest for the most-active contract Cv1 since June 30.
CBOT November soybeans SX2 were 34-1/2 cents higher at $14.69-3/4 a bushel.
"The market has focussed on reports coming from scouts in the western Midwest," said Tobin Gorey, director of agricultural strategy at the Commonwealth Bank of Australia. "Crop problems are suspected of being greatest in that region, and the reports coming back so far (are) mostly bad."
Condition ratings for corn and soybeans declined in the latest week, the U.S. Department of Agriculture said after the market closed on Monday, bucking analyst expectations for no change as stressful dry conditions continued to impact crops.
CBOT December soft red winter wheat WZ2 was 20-3/4 cents higher at $8.09 a bushel.
Additional reporting by Naveen Thukral in Singapore and Sybille de La Hamaide in Paris; Editing by Sherry Jacob-Phillips, Jan Harvey and Mark Porter