The US soybean futures market was on fire while corn got even more expensive following the government's crop forecasts.
The Department of Agriculture expects corn production this year to be down 7 percent from the record breaking heights of 2007.
The report released Friday projects about 12 billion bushels of corn will be harvested this year. About one-third of that amount will be directed toward ethanol production.
Wet weather has slowed corn plantings, causing the greatest delay since 1995. The USDA reports that only 27 percent of the nation's corn crop had been planted through May 4.
The report is unwelcome news for those looking for relief in corn prices. The crop's price has skyrocketed over the last year to more than $6 a bushel, amid an ethanol boom and more demand for exports.
After some morning profit-taking Friday, corn started gaining back its bullish fever by midday, led by the new-crop months.
When CBOT corn slipped early -- even though USDA forecast the US supply of corn to drop in half to 763 million bushels during the coming year -- it came as a surprise to some.
The unusually wet spring has pushed corn planting back to its slowest start since 1999. That has raised fears of lower yields or intended corn-acres switched to soybean. The Midwest is expected to get another round of rain over the weekend and next week, which will continue to limit planting.
Chicago corn set record highs on Thursday and again during the overnight session.
Old-crop July corn was up 2 cents at $6.32-1/4 per bushel and new-crop December was 6-3/4 cents higher at $6.53.
Soybeans were up 3.6 percent past midday as traders reacted to the federal government's bullish domestic soy supply forecasts.
Other grains slipped on profit-taking, though rice got more expensive and only wheat was trading lower despite numbers that indicated strong supplies this year.
The government trimmed its projection of how many soybeans will be left at the end of the 2007/08 by 15 million bushels to 145 million and pegged 2008/09 soy stocks at 185 million for the marketing season.
"The only surprise is to see the beans as tight as they are, at 185 million bushels, given that ... production is up 20 percent," said Joe Victor, analyst with Allendale, an Illinois farm advisory firm.
The global trend for consumption of grains and oilseeds to stay strong in the coming year keeps ag commodity prices historically high -- two to three times traditional levels.
The actively traded July soybean contract on the Chicago Board of Trade was up 43 cents at $13.53 per bushel past midday.
The big drops were in wheat and rice after USDA forecast record world output for both in 2008.
"With wheat, there's plenty of it around. USDA confirmed that today -- we're going to have more than we need and that's going to build stocks," Maguire said.
CBOT new-crop July wheat was down 20 cents at $8.02 per bushel, while July rice was up 4-1/2 cents at $22.39-1/2 a bushel after climbing the $1.15 limit during Asian trading hours and then slipping nearly $1 Friday morning.
"The market just got trashed. There's some big-time profit-taking there," said analyst Jack Scoville with Price Futures Group in Chicago.
Rice remains underpinned by prospects for reduced output from cyclone-devastated Myanmar, traders said. USDA forecast the cyclone cut Myanmar's rice crop by 7 percent.
"Supply worries have intensified with the Myanmar cyclone and the market is likely to continue to rise and probably test its record highs soon," a Seoul trader said during the Asian session.