From Bloomberg:

Corn futures rose the most in almost two weeks and soybeans gained on speculation that the recent Midwest heat wave will mean smaller production than the record crops predicted today by the government.

August has gotten off to the second-warmest start since 1960, T-Storm Weather LLC said today in a report. Another forecaster, Commodity Weather Group LLC, said about 25 percent of the U.S. soybean-growing area won't get enough rain for proper plant development over the next two weeks, and that the dryness could harm a third of the Midwest should rain miss sections of Illinois this weekend, as expected.

"The crops are going downhill rapidly in parts of the Midwest and South," said Mark Schultz, the chief analyst for Northstar Commodity Investment Co. in Minneapolis. "Our farmers are already preparing for corn yields that may fall 5 percent to as much as 10 percent from earlier field samples."

Corn futures for December delivery rose 12.5 cents, or 3 percent, to $4.235 a bushel at 11:24 a.m. on the Chicago Board of Trade. A close at that price would be the biggest gain since July 30. The most-active contract reached a 13-month high of $4.39 on Aug. 4 after Russia halted grain exports for the rest of the year because of drought.

Soybean futures for November delivery climbed 13.75 cents, or 1.4 percent, to $10.2925 a bushel on the CBOT, after dropping 1.9 percent the previous two days. On Aug. 5, the oilseed reached a seven-month high at $10.49.

Farmers will harvest 13.365 billion bushels (339.5 million metric tons) of corn this year, up from a record 13.11 billion last year and more than the 13.245 billion bushels forecast last month, the U.S. Department of Agriculture said today in its first survey-based estimate for the crop. The average estimate of 28 analysts questioned by Bloomberg News was 13.255 billion.

The soybean crop will total 3.433 billion bushels, up from a record 3.359 billion in 2009, USDA said. The average estimate of 28 analysts was 3.36 billion. A month ago, the USDA predicted a crop of 3.345 billion.

Corn is the biggest U.S. crop, valued at $48.6 billion in 2009, followed by soybeans at $31.8 billion, government figures show.

To contact the reporter on this story: Jeff Wilson in Chicago at jwilson29@bloomberg.net.

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