U.S. corn extends rally to seventh day; soybeans rise on output worries

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MUMBAI — U.S. corn futures rose for a seventh straight session on Thursday to trade near a two-month high, supported by concerns that hot and dry weather in the Midwest during key crop development periods could reduce yields.

Soybeans edged higher on concerns over supplies from the United States, although an expected rise in Brazil’s output capped the upside. Wheat rose for a fifth straight session on lower supplies from the Black Sea region amid strong demand.

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The Chicago Board of Trade (CBOT) most-active corn contract was up 0.65% at $6.61-1/2 a bushel, as of 0328 GMT, not far from Wednesday’s peak of $6.71.

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Wheat edged up 0.31% to $8.15-3/4 a bushel and soybeans rose 0.21% to $14.60-1/2 a bushel.

Corn yield prospects in Western Iowa are lower than last year, scouts on an annual tour of top U.S. producing states found on Wednesday. Illinois corn yield prospects and soybean pod counts are also lower than last year but above the three-year average.

Indiana corn yield prospects are lower than last year and below the three-year average, while corn yield prospects and soybean pod counts in Nebraska are also lower than last year and below their three-year averages.

“Lower yield reports from Iowa and Illinois are supporting corn and soybeans. But a few traders are booking profit as prices jumped too much in a short span,” said a Mumbai-based dealer with a global trading firm.

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Bumper U.S. crops are needed to offset low global grain supplies, but extreme heat and widespread drought in parts of the Midwest have hampered fields and a string of troubled crop harvests worldwide are pointing to multiple years of tight supplies and high food costs.

Brazil is set to plant its biggest soybean crop to date, as farmers in the world’s largest supplier of the oilseed get ready to sow a larger area starting in September.

The market is closely monitoring a heatwave in China, which could be forced to ramp up imports of corn, soybean and rice in coming months if dryness continues for a few weeks, the dealer said.

Extreme heat in China played havoc on Wednesday despite lower temperatures in some regions, with authorities across the Yangtze river basin scrambling to limit the damage from climate change on power, crops and livestock. (Reporting by Rajendra Jadhav; Editing by Subhranshu Sahu and Anil D’Silva)