Corn up for 5th day as dry weather threatens US crop; wheat firm

SINGAPORE: Chicago corn rose for a fifth consecutive session on Thursday and traded near a one-year high hit in the previous session as concerns over dry weather across the US Midwest triggered short-covering.

Wheat traded near its highest level in more than a month on adverse US weather while soybeans gained on the back for higher corn prices.

The Chicago Board Of Trade most-active corn contract rose 0.4 percent to $3.86-1/4 a bushel by 0256 GMT, having gained 2 percent in the previous session when prices climbed to $3.87 a bushel, the highest since June 2016.

Wheat added 0.5 percent to $4.46-3/4 a bushel after closing up 2 percent on Wednesday when prices hit highest since May 4 at $4.48-3/4 a bushel. Soybeans gained 0.3 percent to $9.33-1/2 a bushel.

Hot and dry weather in the northern US Plains and northern Midwest is expected over the weekend, potentially damaging crops.

The US corn crop is still a few weeks from its key pollination phase, which usually occurs in July.

Weather jitters come as commodity funds hold large net short positions in corn, wheat and soybeans, leaving the markets vulnerable to short-covering.

Funds were net buyers of CBOT corn, wheat and soybean futures on Wednesday.

"Certainly there are some concerns about crop conditions in the United States, especially for corn but steep decline in oil prices might partly offset those gains," said Phin Ziebell, an agribusiness economist at National Australia Bank.

"It might not be profitable to make ethanol."

Oil prices slid 5 percent on Wednesday to a one-month low, after an unexpected increase in US inventories of crude and gasoline fanned fears that output cuts by major world oil producers have not done much to drain a global glut.

The corn market closely tracks moves in crude oil prices with increasing use of crops in making renewable fuels.

The US Department of Agriculture on Monday rated 68 percent of the corn crop in good to excellent condition, up from 65 percent a week earlier, but the figure was down from 75 percent a year ago.

The US Agriculture Department's monthly crop reports, which have traditionally provided huge shocks to the market, have been met by a shrug in 2017, with price moves and volume muted by the massive supply of grains.