Corn futures popped to a year high on Monday as traders rushed to secure supply ahead of looming weather troubles.
Forecasters see some of the hot and dry conditions that have plagued the northern Plains spring wheat crop shifting into the Midwest, where they risk harming many of this year's corn and soybean fields.
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Dryness is already stressing crops in the western Midwest, according to MDA Weather Services, and will allow moisture to decline in the central and eastern Midwest over the next six to 10 days.
"Traders always trade fear before fact. The fear is what happened to Minneapolis [spring] wheat this year would happen to corn and soybeans," said Brian Hoops, president of brokerage Midwest Market Solutions in Springfield, Mo. "We could see sharply higher prices as a result, and they don't want to miss out on that."
The increased risk that dryness could cause yield loss for the corn crop, which is pollinating and exposed to weather changes, and soybeans, which have more time to mature, prompted funds on Monday to get out of their widely held bets that prices would fall, analysts said.
The Commodity Futures Trading Commission said on Friday that money managers were still net short corn and soybean futures and options, despite many reversing their positions.
Corn futures for September delivery rose 2.4% to $4.02 a bushel at the Chicago Board of Trade on Monday, the highest close since late June 2016.
Soybean futures also climbed to fresh highs, with CBOT August contracts rising 2.4% to $10.24 3/4 a bushel. That was the highest close in over four months.
Wheat futures, meanwhile, resumed a rally that halted last week on profit taking. Weather forecasters don't see a silver lining for the spring wheat crop, with little prospect of an ease in the drought conditions that have led some Dakota farmers to abandon their crop altogether.
CBOT September winter wheat futures climbed 2.8% to $5.50 a bushel while September spring wheat at the Minneapolis Grain Exchange bounced 4% to $7.97 1/2.
The U.S. Department of Agriculture will release an updated crop-condition report at 4pm EDT.
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(END) Dow Jones Newswires
July 10, 2017 15:38 ET (19:38 GMT)