U.S. corn, soybeans slip from record highs; USDA awaited

(Reuters) – U.S. corn and soybeans fell back on Monday, coming off record highs in the previous session, as the worst drought in the U.S. Midwest since 1956 continued to set the overall market tone and with the market awaiting new data on crop conditions. The U.S. Department of Agriculture is due to release its crop condition report later on Monday. The unrelenting hot, dry weather, has caused significant damage to U.S. crops, raising fears of a global food shortage.

FUNDAMENTALS

* Chicago Board Of Trade December corn fell 1.16 percent to $7.86-1/2 a bushel, rebounding from a session low of $7.82-1/2 a bushel, after closing up 2.2 percent on Friday.

* Spot corn fell 1.24 percent to $8.14-1/4 a bushel, falling back from a record high of $8.28-3/4 a bushel hit on Friday before finishing up 2.07 percent to $8.24-1/2 a bushel in the previous session.

* New-crop November soybeans slipped 1.56 percent to $16.60 a bushel after climbing 2.6 percent to a record high in the previous session

* Chicago September wheat fell 1.75 percent to $9.26-3/4 a bushel, having closed up 0.88 percent on Friday after hitting a contract top of $9.43 a bushel.

* Extreme heat and drought conditions were set to continue baking already scorched corn and soybean crops in America’s breadbasket through early August as weather forecasts provided little hope of relief over the next two weeks. Commodity Weather Group (CWG) on Friday said the hot and dry pattern would continue to stress crops in more than half of the Midwest for the next two weeks.

* U.S. government’s National Oceanic and Atmospheric Administration (NOAA) on Thursday issued a forecast that showed no relief from the drought for at least the rest of this summer.

* The rapid price surge was worrying, and prices could rise even further in the coming weeks, driven by U.S. corn, Abdolreza Abbassian, senior economist and grain expert at the United Nations’ Food and Agriculture Organization (FAO), told Reuters.

* Expected crop shortfalls and surging prices, with corn and soybean posting their fifth straight week of gains, prompted the United Nations agriculture agency to talk of a “serious situation” though not yet a food crisis.

MARKET NEWS

* The euro fell to a near 12-year trough on the yen and plumbed record lows versus its Australian counterpart on Monday, starting the new week under pressure on persistent fears that Spain will eventually need a full sovereign bailout.

* Oil prices fell on Friday, snapping a string of seven straight higher settlements, as the euro zone debt crisis brought economic concerns back in focus and strengthened the dollar.

* U.S. stocks broke a three-day winning streak on Friday as Europe’s debt crisis engulfed markets with renewed fears that Spain may be unable to dodge a costly bailout.

DATA/EVENTS (GMT)

1300 Australia Producer Price Index Q2

1400 Euro zone Consumer Confidence JULY

1500 U.S. export wheat inspections Weekly

1500 U.S. export corn inspections Weekly

1500 U.S. export soy inspections Weekly

Grains prices at 0047 GMT

Contract Last Change Pct chg Two-day chg MA 30 RSI

CBOT wheat 926.75 -16.50 -1.75% +41.06% 623.55 80

CBOT corn 786.50 -9.25 -1.16% +19.44% 614.81 72

CBOT soy 1660.00 -26.25 -1.56% +35.23% 1169.65 73

CBOT rice $15.56 $0.02 +0.13% +6.21% $14.46 70

WTI crude $91.31 -$0.52 -0.57% -11.32% $98.57 67

Currencies

Euro/dlr $1.213 -$0.081 -6.26% -7.03%

USD/AUD 1.033 -0.003 -0.31% -0.34%

Most active contracts

Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight

RSI 14, exponential

(Reporting by Colin Packham; Editing by Ed Davies)