CHICAGO: US corn futures extended a rally on Wednesday to their highest in more than three months after a steeper-than-expected reduction to the US government's 2020 corn acreage estimate, analysts said.
Soyabeans and wheat also gained after the US Department of Agriculture's acreage report on Tuesday also showed smaller-than-expected plantings of the grains.
Chicago Board of Trade September corn was up 9-1/2 cents by 1:05 p.m. (1805 GMT) at $3.51 a bushel, after reaching its highest since March 31 at $3.53-3/4.
CBOT August soyabeans were up 9-1/4 cents at $8.88 a bushel and September wheat was up 4-1/4 cents at $4.96 a bushel.
The USDA on Tuesday said US farmers planted 92 million acres of corn this spring, well short of analyst expectations and 5 million acres below the USDA's March forecast of 97 million acres - the biggest March-to-June drop since 1983.
The data came at a time when commodity funds hold a large net short position in CBOT corn, leaving the market vulnerable to bouts of short-covering.
"Funds are short almost 300,000 corn contracts. A little surprise would've sparked a lot of buying, but we had a huge surprise, and it has real impact on the stocks outlook," said Terry Roggensack, analyst at the Hightower Report.
Hot, dry weather forecasts across the US Midwest have also elevated concern about crop stress as US corn and soyabeans move into key summer growth stages.
"We have a hot, dry forecast for the next few weeks as well. We'll be catching some corn in the tasseling stage and the pollination phase," said John Zanker, market analyst at Risk Management Commodities.
"If you come in Monday and that forecast still hasn't changed from hot and dry, we're going to probably touch $3.75 December futures next week. That's just something we weren't thinking about two days ago."
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