* U.S. corn belt seen dry, warm for next 15 days
* Crops at risk for damage following late spring planting
* Freeze in Argentina buoys wheat market
(Adds closing prices, fund buying, crop-progress data)
By Tom Polansek
CHICAGO, Aug 26 (Reuters) - New-crop U.S. soybean futures
soared their daily trading limit to an 11-month high on Monday,
and corn reached a one-month peak above $5 per bushel, as hot,
dry weather threatened to cut crop yields in parts of the U.S.
Wheat jumped to its highest level in three weeks, buoyed by
the sharp gains in corn and soybeans and by worries that a cold
snap will reduce Argentina's wheat harvest.
Forecasts for stressful weather in the U.S. farm belt
ignited a rally because the corn and soy crops are less mature
than normal for this time of year, putting them at greater risk
of damage. Soybeans are seen as particularly vulnerable to dry
weather as the crop is entering the critical pod-filling stage
Key growing states like Iowa and Illinois will be
"completely dry this week and very warm," said Don Keeney, a
meteorologist at MDA Weather Services. Not much relief is
expected for the next 15 days, he said.
"The forecast has got everybody spooked," said Linn Group
analyst Roy Huckabay.
Chicago Board of Trade November soybeans surged the
daily, exchange-imposed limit of 70 cents during the session and
closed up 61-1/2 cents at $13.89-1/2 a bushel. December corn
jumped 30-1/2 cents to $5.00-1/2 a bushel.
Prices climbed after December corn earlier this month
dropped to its lowest level in nearly three years on
expectations for a bumper U.S. harvest. Soybeans earlier this
month hit a one-year low.
"I think people got way ahead of themselves," Jerry Gidel,
chief feed grains analyst for Rice Dairy, said about the recent
selloff. "Like it or not, this market is going to be highly
Grain buyers hope large harvests this autumn will replenish
corn inventories that are expected to drop to a 17-year low by
the end of the month. Soy inventories are projected at a
Supplies are tight due to strong demand and a poor harvest
last year, when the United States suffered its worst drought in
more than half a century. Hot, dry weather renewed worries that
supplies could remain scarce.
"The drought is fresh in peoples' minds, and that is
prompting some high amounts of fund participation," said
Sterling Smith, futures specialist for Citigroup.
Commodity funds bought an estimated 30,000 corn contracts,
23,000 soybean contracts and 7,000 wheat contracts, traders
DRY FOR TWO WEEKS
The U.S. Department of Agriculture, in a weekly
crop-progress report on Monday, rated 59 percent of the
country's corn crop as good to excellent, down 2 percentage
points. Soybeans were rated 58 percent good to excellent, down 4
percentage points from a week ago.
In Iowa, the top producer of both crops,
"higher-than-average temperatures, coupled with the lack of
significant precipitation, heightened concerns over soil
moisture and crop conditions," USDA said.
Still, harvests are expected to be historically large.
Farm advisory Pro Farmer on Friday projected record U.S.
2013 corn production of 13.46 billion bushels, based on a yield
of 154.1 bushels per acre. USDA last forecast a 13.763
billion-bushel crop, with a yield of 154.4 bushels per
For soybeans, Pro Farmer forecast U.S. production at 3.158
billion bushels, with an average yield of 41.8 bushels per acre
- which would be the fourth-largest in history. The estimate is
3 percent below USDA's latest outlook for a crop of 3.255
billion bushels, with a yield of 42.6 bushels per acre.
Weather also was a worry for wheat traders. A freeze in
Argentina "was cold enough to damage early jointing wheat,"
according to Commodity Weather Group.
Spot-month September wheat climbed 20-1/4 cents to
$6.54-3/4 a bushel at the CBOT.
Prices at 3:25 p.m. CDT (2025 GMT)
LAST NET PCT YTD
CHG CHG CHG
CBOT corn 500.50 30.50 6.5% -28.3%
CBOT soy 1389.50 61.50 4.6% -2.1%
CBOT meal 458.60 25.40 5.9% 9.0%
CBOT soyoil 44.44 1.80 4.2% -9.6%
CBOT wheat 654.75 20.25 3.2% -15.8%
CBOT rice 1624.00 46.50 3.0% 9.3%
EU wheat 191.75 6.25 3.4% -23.4%
US crude 106.23 -0.19 -0.2% 15.7%
Dow Jones 14,946 -64 -0.4% 14.1%
Gold 1402.16 5.72 0.4% -16.3%
Euro/dollar 1.3370 -0.0011 -0.1% 1.3%
Dollar Index 81.3840 0.0250 0.0% 2.0%
Baltic Freight 0 0 0.0% -100.0%
(Additional reporting by Julie Ingwersen in Chicago, Sybille de
La Hamaide in Paris and Naveen Thukral in Singapore; Editing by
Marguerita Choy and Jim Marshall)