Corn, wheat hit 8-year highs on Brazil, US weather worries

CHICAGO: Chicago corn, wheat and soybean futures extended a rally on Tuesday to eight-year highs, supported by corn supply worries as adverse weather cast early doubts over harvest prospects in top exporters Brazil and the United States.

A sharp decline in weekly US wheat crop ratings also kept the focus on weather risks for northern hemisphere wheat.

Soybeans found support in firmer crude oil and vegetable oil markets, after they had been pressured on Monday by expectations that surging coronavirus cases in India would cut demand.

The most-active corn contract on the Chicago Board of Trade (CBOT) was up 10 cents to $6.67-1/2 per bushel by 10:53 a.m. (1653 GMT), after reaching $6.84, its highest since March 2013.

Soybeans gained 1 cents to $15.40-1/4 per bushel, after hitting their highest since October 2012 at $15.74-3/4. CBOT wheat added 4-3/4 cents to $7.44-1/4 per bushel, after earlier reaching its highest since February 2013 at $7.69-1/2.

Brazil's upcoming second corn crop is seen as crucial to replenishing tight global stocks, though weather forecasts show little rain for dry southern regions in the week ahead.

"We started to rally last night, when South America took the rain out of the forecast," said Dan Smith, senior risk manager at Top Third Ag Marketing.

The front-month May contract, which expires next month, earlier rose by an expanded daily limit of 40 cents.

US plantings have been delayed by cold temperatures, though pace is expected to pick up in the coming weeks. ]

Meanwhile, elevated futures prices may translate to more farmers selling old-crop supplies.

"I think we're trying to get to a level where we entice the grain in the farmers hands or the elevator to move into the pipeline," said Don Roose, president of US Commodities.

Wheat also drew support from weather. The USDA estimated 49% of US winter wheat was in good or excellent condition, in a four-point drop from a week earlier that was sharper than expected on average by analysts.