Chicago | Reuters – U.S. corn futures surged 4.2 percent 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 soybean market rally, 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 … 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.
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Corn futures have risen for five sessions in a row, gaining 7.4 percent during the streak.
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.
Chicago Board of Trade December corn futures CZ2 settled up 26-1/4 cents at $6.55-1/4 a bushel. Prices peaked at $6.62, the highest for the most-active contract Cv1 since June 30.
Corn futures have risen 7.4 percent during their winning streak.
CBOT November soybeans SX2 were 25-3/4 cents higher at $14.61 a bushel.
“The perception of crop size seems to have changed to the downside overnight,” Charlie Sernatinger, global head of grain futures at ED&F Man Capital, said in a research note.
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 analysts’ expectations for no change as stressful dry conditions continued to impact crops.
CBOT December soft red winter wheat WZ2 was 12-1/4 cents higher at $8.00-1/2 a bushel.
– Additional reporting by Naveen Thukral in Singapore and Sybille de La Hamaide in Paris
