Corn, Soybeans Will Continue to Be a 'Buy': Pro

Both corn and soybean prices have slid from Monday’s record highs and should be considered a buying opportunity if this pull-back continues in the short term, Erin FitzPatrick, Commodity Analyst at Rabobank, told CNBC.

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The curled leaves of corn plants suffering from a lack of moisture stand in a field in Princeton, Illinois. The leaves would typically be open and flat. Corn supplies in the U.S., the world's biggest exporter, are declining at the fastest pace since 1996 just as a Midwest heat wave damages the world's largest harvest for a third consecutive year.

With the worst drought in the Midwest of America since 1988, the U.S. Department of Agriculture has cut estimates for this year’s yields. Corn

will average just 146 bushels an acre, down 20 bushels from its June estimate. Soybean yields were cut nearly 8 percent to 40.5 bushels per acre, which is the second lowest since 2003.

“Very bullish situations for both corn and soybeans in the U.S. and globally, because of this severe drought in the U.S. at the moment.” Fitzpatrick told CNBC’s “Worldwide Exchange”.

“Corn at the moment is within about 40 cents of the record highs that we saw last year. Even though we are at these extremely high price levels the outlook over the next seven to ten days continues to look hot and dry.” She said, before explaining that the long term weather outlook showed little sign of improvement.

The reduction in estimates by the USDA has been more drastic than analysts had initially expected, sending corn and soybean prices up by more than a third over the past month, however prices have reduced since the USDA’s announcement.

“We’ve seen a bit of a pullback in prices in the last few trading sessions and certainly if this continues in the short term we would still consider it a buying opportunity.” Fitzpatrick said.

“If we start to see corn maybe pull back under $7 per bushel in the short term. The same thing with soy beans, maybe if they drop back around that $15 range.”