GRAINS-Corn, soybean futures soar on U.S. dry weather worries

Credit: REUTERS/DANE RHYS

By Julie Ingwersen

CHICAGO, June 15 (Reuters) - U.S. corn futures hit their highest levels in nearly two months and soybeans hit a one-month high as forecasts for continued dry weather in key portions of the Midwest crop belt raised concerns about yield prospects, analysts said.

Chicago Board of Trade (CBOT) wheat futures surged about 5% on short-covering, a softer dollar and stressful weather in Europe.

As of 12:50 p.m. CDT (1750 GMT), CBOT July corn CN3 was up 17-3/4 cents at $6.25-1/4 per bushel after reaching $6.26-12, the contract's highest since April 21. July soybeans SN3 were up 42-1/2 cents at $14.30-3/4 per bushel after hitting $14.31-1/2, their highest since May 9.

CBOT July wheat WN3 was up 33 cents at $6.63-3/4 a bushel.

Crop weather was the driving factor. A three-month seasonal drought outlook released on Thursday by the U.S. Climate Prediction Center projected drought persisting or developing from eastern Iowa through much of Illinois, Indiana and Ohio through September.

"It's all weather. The extended maps keep going drier and drier, every time they come out. A good chunk of the Corn Belt is going to be dry," said Sherman Newlin, an analyst with Risk Management Commodities.

A bounce in crude oil CLc1, after a slide on Wednesday tied to economic concerns and a U.S. Federal Reserve policy outlook seen as hawkish, also underpinned grains, along with a weaker dollar .DXY, which tends to make U.S. grains more attractive globally. O/RUSD/

Soybeans and soyoil futures drew additional support after the National Oilseed Processors Association (NOPA) said their members processed 177.915 million bushels of soybeans in May, topping most trade estimates and the highest ever level for the fifth month of the year.

Soyoil stocks among NOPA members fell more than analysts expected in May, even though the trade group included data from a new crushing plant in Iowa.

The wheat market has been assessing crop weather and uncertain prospects for the Black Sea grain corridor allowing shipments from war-torn Ukraine.

The Kremlin on Thursday said it saw no positive prospects when it came to renewing the Black Sea grain deal given that parts of the accord affecting Russia remained unfulfilled.

Consultancy Strategie Grains lowered its monthly forecast for this year's European Union wheat crop, citing dryness in Spain and northern Europe.

(Reporting by Julie Ingwersen; additional reporting by Gus Trompiz in Paris and Rajendra Jadhav in Mumbai; Editing by Sherry Jacob-Phillips, Varun H K, Sonia Cheema and Sandra Maler)

((Julie.ingwersen@thomsonreuters.com; 1-313-484-5283; Reuters Messaging: julie.ingwersen.thomsonreuters.com@reuters.net))

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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