GRAINS-U.S. corn and soy jump 3 percent on weather threat
* Dry weather threatening to trim yields
* Biggest threat is to pod-setting soybean crop
* Wheat follows corn and soybeans higher
(Adds U.S. trading session, weather details, new analyst quotes) CHICAGO, Aug 19 (Reuters) - Chicago Board of Trade (CBOT) soybean and corn futures rose 3 percent on Monday, closing in on four-week highs, as dry weather threatened to trim U.S. crop yields. Wheat gained 1.5 percent on spillover buying from the corn and soybean markets, traders and analysts said. "It's a weather market, there's not much rain across the Midwest. I expect to see corn conditions down 2 percentage points today and soybeans down 1 to 2," said Sterling Smith, a futures specialist for Citigroup. At 10:08 a.m. CDT (1508 GMT), CBOT November soybeans were up 30-1/2 cents at $12.90 per bushel, December corn was up 13-1/2 cents at $4.77, and September wheat was up 8-3/4 cents at $6.39-3/4. CBOT new-crop December corn has over 60 percent of total futures open interest of 1.2 million contracts, and the November soybean contract also accounts for 60 percent of the total open interest of about 537,000 contracts, according to CBOT data.
The U.S. Department of Agriculture (USDA) is to release its weekly crop progress report at 3 p.m. CDT (2000 GMT) Monday. A Reuters poll of analysts indicated good-to-excellent ratings for corn and soybeans would fall 1 percentage point, to 63 percent.
Last week, USDA reported the U.S. corn conditions at 64 percent good-to-excellent, and 32 percent was filling kernels or in the dough stage of development. Also, 64 percent of the soybean crop was rated good-to-excellent, and 58 percent was setting pods. Dry weather now could further lower condition ratings and interfere with the corn kernel filling process, and could cause severe harm to the vulnerable soybean crop since it is in its pod-setting stage of growth. The turn to dry weather comes as analysts were penciling in bumper crops of U.S. corn and soybeans on big plantings of each and a mild summer following a late start due to a wet spring sowing season. "I think after USDA's report everyone was expecting bigger crops in the next report, but now they're not so sure of that," a trader said. The USDA in its August crop report pegged 2013 corn and soybean production at lofty levels, but below the estimates of many analysts. Traders and analysts have been expecting USDA to show larger crop prospects in its upcoming September crop report, but they note there is a lot of uncertainty due to the turn to dry weather. Drier weather through the end of August likely will begin trimming U.S. corn and soybean yield prospects, an agricultural meteorologist said on Monday. "Corn yields may be trimmed a little, and I would be surprised if we don't cut soybean yields," said John Dee, a meteorologist for Global Weather Monitoring. Importers are hoping for record U.S. production to ease three years of tight grains and oilseed supplies. "It's August, which is often a slow and choppy month. The crop tour is going on, so I expect to see tweets from there, moving the market," Smith said. This week's annual Pro Farmer tour of Midwest crops is expected to find potential bumper crops of corn and soybeans but also crop maturity that is below normal. CME Group Inc, parent of the CBOT, lowered initial margins for agricultural commodity futures nearly across the board on Friday. The exchange operator lowered corn futures initial margins for speculators by 25 percent, to $2,025 per contract from $2,700. CME cut soybean futures initial margins for speculators
Prices at 10:14 a.m. CDT (1514 GMT)
LAST NET PCT YTD CHG CHG CHG CBOT corn 486.00 12.25 2.6% -30.4% CBOT soy 1309.00 25.75 2.0% -7.7% CBOT meal 414.30 5.50 1.4% -1.5% CBOT soyoil 43.40 0.59 1.4% -11.7% CBOT wheat 640.25 9.25 1.5% -17.7% CBOT rice 1551.00 -5.00 -0.3% 4.4% EU wheat 184.75 1.00 0.5% -26.2% US crude 107.40 -0.06 -0.1% 17.0% Dow Jones 15,081 -1 0.0% 15.1% Gold 1366.56 -9.34 -0.7% -18.4% Euro/dollar 1.3348 0.0019 0.1% 1.2% Dollar Index 81.2320 -0.0250 0.0% 1.8% Baltic Freight 1115 13 1.2% 59.5%
(Additional reporting by Naveel Thukral in Singapore and Sybille de La Hamaide in Paris)