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Corn futures rally to 11-week high on U.S. crop woes

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Forexpros - Corn futures rallied to an 11-week high on Monday, extending sharp gains from the previous session after a leading industry group lowered its U.S. corn crop forecast, adding to growing fears over deteriorating U.S. crop conditions.

On the Chicago Mercantile Exchange, corn futures for December delivery traded at USD7.7688 a bushel during European morning trade, gaining 0.7%.

It earlier rose as much as 1% to trade at USD7.7888 a bushel, the highest price since June 14.

Industry weather group Global Weather Monitoring said in a report over the weekend that it expected hot, dry weather in the U.S. Midwestern states to linger through September 2.

The adverse weather outlook exacerbated fears over U.S. corn crop conditions after the Professional Farmers of America, an agricultural advisory firm projected the U.S. corn crop to total 12.484 billion bushels, 3.3% below the U.S. Department of Agriculture's official forecast of 12.914 billion bushels.

Pro Farmers' estimates were released after markets closed Friday, following a four-day tour through the U.S. corn belt to inspect the crop ahead of the fall harvest.

Participants on the crop tour said a combination of stress from summer heat coupled with storm damage was likely to weigh on yields from corn crops.

The U.S. is both the world's largest corn producing nation and the world's largest exporter of the grain.

Corn futures surged nearly 3% on Friday after Federal Reserve Chairman Ben Bernanke said the central bank remained prepared to implement fresh measures to stimulate U.S. economic growth.

Speaking at the Fed's annual gathering in Jackson Hole, Wyoming, Bernanke said the central bank "has a range of tools that could be used to provide additional monetary stimulus", without outlining when and if this may happen.

Elsewhere on the Chicago Mercantile Exchange, wheat for December delivery added 0.23% to trade at a three-month high of USD8.0513 a bushel, while soybeans for November delivery rose 0.66% to trade at a five-month high of USD14.3888 a bushel.

Later in the day, the U.S. Department of Agriculture was to publish its weekly crop progress report, which will provide an indication on how U.S. crops fared over the past week.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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