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GRAINS-Corn hits 8-year high as Brazil drought lifts supply concerns

By Colin Packham

CANBERRA, May 3 (Reuters) - U.S. corn futures rose more than 3% on Monday to hit their highest in more than eight years as a drought in southern Brazil exacerbated worries about global supply.

Wheat tracked corn rally and jumped 2%, while soybeans rose 1.5%.

The most-active corn futures on the Chicago Board of Trade were up 2.9% at $6.93-1/2 a bushel by 0235 GMT, hovering near the session high of $6.97-1/4 a bushel - the highest since March 2013. Corn closed 3.9% higher on Friday.

"Brazil's weather continues to provide support for the price gains. A material chunk of Brazil's second corn crop sits in drying soils," said Tobin Gorey, director of agricultural strategy, Commonwealth Bank of Australia.

Brazil's 2020/2021 total corn crop estimate was lowered by almost 8% to 104.1 million tonnes as dry weather is affecting yields of the country's second corn plantings, forecaster Safras & Mercado said on Friday.

The overall production forecast was affected by a cut of some 10 million tonnes of Brazil's second corn forecast, now expected to be 70.7 million tonnes, according to Safras.

The most active soybean futures rose 1.5% to $15.57-1/2 a bushel, after closing 2.1% higher in the previous session.

The most active wheat futures climbed 2.1% to $7.50-1/4 a bushel after closing up 0.8% in the previous session.

The condition of French wheat and barley declined sharply in the week ended April 26, data from farm office FranceAgriMer showed on Friday, suggesting a growing impact from dry, cold weather this month. (Reporting by Colin Packham, Editing by Sherry Jacob-Phillips)

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