US corn hits new high, beans rise 4th day in a row

KANSAS CITY: US grains posted early gains on Monday, as a weaker dollar encouraged export business and equity markets strengthened.

Renewed bullish fervor helped push actively traded December corn to a new contract high and pushed soybean futures higher for the fourth straight session.

Fundamental support stemmed from a US Department of Agriculture report last week which projected lower output following heat damage to the crops in July.

Wheat prices were supported by improving export demand amid the weakness in the US dollar. Traders noted that Saudi Arabia bought 660,000 tonnes of wheat from Australia, Europe, Canada and the United States at an average price of $346 per tonne, including cost and freight.

"Fundamentally, the wheat market is supported by Saudi Arabia taking a large chunk of US wheat over the weekend, which is in addition to big purchases Algeria announced earlier," said Luke Mathews, commodity strategist at Commonwealth Bank of Australia.

The front-month wheat contract has risen around 8.5 percent in five sessions of gains as USDA slashed production for US spring wheat crop following excessive rains in the northern Plains.

Concerns have also deepened in recent days that an unprecedented drought in the states of Texas and Oklahoma will prevent farmers from planting hard red winter wheat for which seedings typically begin as early as September.

At 9:56 a.m. CDT (1456 GMT), CBOT November soybeans were up 12-3/4 cents at $13.40-1/2 per bushel while CBOT September corn was up 5-1/4 cents at $7.07, after rising early to $7.11-3/4. Actively traded December corn futures hit a new contract high of $7.24-1/4 early.

Corn and soybean markets have been boosted by USDA's sharp reduction in crop estimates in the United States to well below trade expectations.

Some analysts expect the department to further reduce the size of the crops as more damage was believed to have been done since the department's field surveys that ended Aug. 1.

The gains in grains come as world stocks climbed further out of their August hole on Monday, lifted by signs of earlier-than-expected recovery in Japan and a growing belief that shares may now be cheap.

Spillover support also stemmed from strength in US crude futures, which rose more than $1 Monday.

Copyright Reuters, 2011