SINGAPORE: Chicago soybean futures climbed to a near five-month top on Monday, while new-crop corn hit a contract high as deteriorating US crop conditions buoyed agricultural markets, raising concerns over global food supplies.
Wheat also jumped to its highest in nearly three months with a drought threatening winter crop planting in the United States and expectations that more wheat will replace expensive corn in animal feed rations.
The grain and oilseed markets received additional support from strengthening equity markets which improved risk sentiment.
Asian stocks opened firmer on Monday after US Federal Reserve Chairman Ben Bernanke left the door open for further action to stimulate the economy and fight high unemployment.
Analysts said the gains in corn -- which has climbed more than 14 percent in August, rising for a second straight month -- could be capped by demand rationing and use of alternatives such as wheat.
"The condition of the US crop is causing concerns but we expect the gains in corn to be limited because it has risen quite a bit," said Lynette Tan, an analyst with Phillip Futures in Singapore.
"It will force end users to switch to wheat, so there could be more upside potential for wheat."
Chicago Board of Trade's actively-traded December wheat rose 0.4 percent to $7.99-3/4 a bushel and the front-month contract climbed to $7.71-1/2 a bushel, the highest since June 9.
November soy rose 0.4 percent to $14.29 a bushel, while the front-month contract touched a high of $14.22-1/2 a bushel, the highest since end-March.
December corn rose nearly 1 percent to $7.74-1/2 a bushel, a contract high.
Leaders of a week-long Midwest tour of corn and soybean fields found the corn yield to be well below the US Department of Agriculture's latest forecast.
Farm newsletter Pro Farmer, which organised the tour that was attended by farmers, agronomists and a large number of participants from the hedge fund industry, pegged this year's corn yield at 147.9 bushels per acre. That compares with USDA's August forecast of 153 bushels.
It estimated US 2011 corn production at 12.484 billion bushels, below USDA's forecast of 12.914 billion, but still potentially the third-largest in US history.
USDA's next forecast for corn production will be released on Sept. 12.
Pro Farmer found brighter prospects for soybeans.
The newsletter pegged the US soybean crop at 3.083 billion bushels -- potentially the 4th-largest in US history -- based on a yield of 41.8 bushels per acre.
But the US Midwest's pod-setting soybeans and filling corn should see dry weather this week, an agricultural meteorologist said, causing stress to the crops.
The market is awaiting USDA's next update on crop conditions due at 2000 GMT. "Today we have the USDA crop progress report which will be probably in line with what Pro farmer crop tour has concluded," said Tan.
The wheat market is being supported by dryness in the US Plains ahead of winter crop planting which is due to begin in September.
Federal Reserve Chairman Ben Bernanke on Friday stopped short of signaling further action to boost growth, but said it was critical for the economy's health to reduce long-term joblessness.
Copyright Reuters, 2011
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