GRAINS-Corn hits 2-month high as U.S. output concerns grow
(Updates prices, adds trader's quotes)
By Rajendra Jadhav
MUMBAI, Aug 24 (Reuters) - Chicago grains futures extended gains on Wednesday, as a tour of key growing areas in the Midwest raised concerns that the size of the U.S. corn and soybeans crop will fall below expectations.
The Chicago Board of Trade's (CBOT) most-active corn contract was up 1.37% at $6.64-1/4 a bushel, as of 0327 GMT, after rising to its highest level since June 28 earlier.
Wheat jumped 1.75% to $8.14-1/2 a bushel and soybeans rose 0.89% to $14.74 a bushel.
Indiana corn yield prospects are lower than last year and below the three-year average, scouts on an annual tour of top U.S. production states found on Tuesday.
South Dakota corn yields were projected at 118.45 bushels per acre, the worst on the tour since 2012.
Ohio corn yield prospects and soybean pod counts are lower than last year.
Nebraska corn yield prospects and soybean pod counts are lower than last year and below their three-year averages.
"The way numbers are getting revised lower, it's pretty clear that actual output number would be much lower than initial optimism," said a New-Delhi based trader with a global trading house.
Bumper U.S. crops are needed to offset low global grain supplies, but extreme heat and widespread drought in parts of the U.S. Midwest have hampered fields and a string of troubled crop harvests worldwide are pointing to multiple years of tight supplies and high food costs.
The market is now waiting to know crop conditions in Illinois and Iowa, which could change supply picture dramatically, the dealer said.
The eastern leg of the Pro Farmer tour will scout fields in Illinois and Iowa, the top producers of both crops, on Wednesday before wrapping up on Thursday in Rochester, Minnesota.
The European Union's crop monitoring service MARS on Monday lowered its yield forecasts again for summer crops in the bloc, with major cuts in maize (corn), sunflower and soybeans, as it expected further damage from the recent dry and hot weather.
Crop prospects in the EU have taken on extra significance this year as Russia's invasion of Ukraine - a major wheat, corn and sunflower exporter - has disrupted Black Sea exports and raised uncertainty over Ukraine's harvest.
"China's demand for all grains and oilseeds might improve if the heatwave and drought across the central China causes significant damage to their crops," the Hightower Report said in a research note. (Reporting by Rajendra Jadhav; Editing by Rashmi Aich)
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