(Reuters) – U.S. corn rose about 1.7 percent on Monday as commodity funds extended net long positions on forecasts for potentially stressful hot weather in the Midwest and the Mississippi River Delta, traders said.
Soybeans and wheat turned lower, retreating from early advances. Soybeans fell on profit-taking after the spot contract on Friday set a near a two-year high above $12 a bushel. Wheat fell as the U.S. winter wheat harvest expanded.
At the Chicago Board of Trade, July corn settled up 7 cents at $4.30 per bushel. July soybeans ended down 9-1/4 cents at $11.69 a bushel and July wheat fell 3-3/4 cents at $4.91-1/4 a bushel.
Corn posted its biggest daily climb in a week as traders focused on hot weather, especially in the Delta, where corn is starting to pollinate, a key growth phase for determining yield.
“As we heat up, the market gets a little more concerned. The South is warm and we are at some critical growing conditions,” said Don Roose, president of U.S. Commodities.
Corn in the core Midwest production belt typically pollinates later, in July.
Traders also cited worries about dry conditions in a few areas.
“The market is building in risk premium on the expectation that seasonally shallow-rooted crops will quickly show stress if dry weather lingers,” Arlan Suderman of INTL FCStone said in a note to clients.
After the CBOT close, the U.S. Department of Agriculture rated 75 percent of the U.S. corn crop in good to excellent condition, unchanged from the previous week. Analysts had expected a slight decline.
CBOT soybean futures turned lower, losing ground to corn on inter-market spreads. Traders booked profits after the spot soy contract failed to challenge Friday’s top of $12.08-1/2 a bushel, the highest since August 2014.
Some analysts expect the USDA to raise its U.S. soybean plantings estimate and lower corn area in a hotly anticipated June 30 acreage report.
Private analytics firm Informa Economics raised its estimate of U.S. 2016 soybean planted area to 83.8 million acres, up from its May forecast of 83.0 million and above the USDA’s March figure of 82.2 million.
Informa cut its estimate of U.S. corn plantings to 92.6 million acres, down from 93.4 million previously and below the USDA’s forecast of 93.6 million.
CBOT wheat fell for a third session, with the July contract dipping to its lowest since June 3 on harvest pressure and the USDA’s forecast for record-large global wheat inventories in the 2016/17 marketing year.
The USDA said the U.S. winter wheat harvest was 11 percent complete by Sunday.
