U.S. soybean rose for a third consecutive day on Wednesday, and corn rebounded from steep losses the previous session as weather forecasts for the Midwest turned drier, threatening yields for the developing crops.
Autumn-harvest soybean prices tested Tuesday's 2-1/2-week high while corn rebounded from the sharpest drop in six weeks in the previous session.
Drier weather was expected for the Midwest through the end of August and warmer temperatures were slated to arrive beginning next week, said Joel Widenor, meteorologist for Commodity Weather Group.
"Our forecast scaled back (rain) coverage in Missouri and Iowa compared with yesterday's forecast," he said. "There will be plenty of dry spots in the Midwest which will hinder filling corn and soybeans."
The warmer weather will help to accelerate crop development, which has been lagging this season following late spring planting and cooler summer temperatures, but will also erode soil moisture levels.
The limited rainfall totals in the forecast arrive at a critical time for corn, which is currently filling pollinated ears with grain, and soybeans, which are adding and filling pods.
"Temperatures are going to warm up, so the GDDs (growing degree days) are going to ratchet higher. But we are not out of the woods yet -- so any time we have a drier type forecast, the market is going to be sensitive to it," said Ken Smithmier with the Hightower Report commodity forecaster.
November soybeans on the Chicago Board of Trade rose 11-1/4 cents, or 0.9 per cent, to $12.39 a bushel, earlier matching a 2-1/2-week high of $12.40 set on Tuesday (all figures US$).
CBOT December corn gained eight cents, or 1.8 per cent, to $4.55-1/4 a bushel after hitting a near-three-year low the previous day. Strong cash markets supported the spot September contract, which jumped 9-1/2 cents, or 2.1 per cent, to $4.64-3/4 a bushel.
Farmers are holding tight to their remaining old-crop corn stocks and some ethanol plants in the northern Midwest have aggressively raised bids for near-term supplies in an attempt to spur selling.
Meanwhile, heavy rainfall in the Southeast and Delta regions has stalled an already-delayed harvest and a tropical storm currently in the Atlantic could push rains further north.
"We are already delayed so any further delays are going to support the old-crop market," Smithmier said.
Wheat futures held near previous levels in light trading amid forecasts for heavy global production, though declines were limited by spillover support from the firmer corn market.
CBOT September wheat rose 2-1/4 cents, or 0.4 per cent, to $6.30-1/2 a bushel after hitting a low of $6.23, the lowest level for a front-month contract since June 2012.
Commodity funds bought a net 10,000 corn contracts, 5,000 soybean contracts and 1,000 wheat contracts on the day, trade sources estimated.
-- Karl Plume reports for Reuters from Chicago. Additional reporting for Reuters by Julie Ingwersen and Sam Nelson.