Corn and soybean futures prices don't accurately reflect production risks in South America, where planting has had a slow start, Rabobank says.

While it's still possible USDA's "optimistic" production estimates for South America will be realized, the region's weather conditions need to improve "to near perfect," firm says.

Supply uncertainty comes as continued strong demand increases the need for record production in South America. Rabobank still sees record high South American soy production and Brazilian corn output, but says if record crops don't materialize, both corn and soybean futures will hit record highs.

CBOT December corn was up 2c to $7.44 a bushel early Friday; November CBOT soybeans were down 3 1/4c to $15.60 3/4.

ian.berry@dowjones.com; @enberry)

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(END) Dow Jones Newswires

October 26, 2012 10:16 ET (14:16 GMT)