The withering U.S. corn crop is gaining some respite from a record heat wave this week but new weather forecasts on Sunday offered scant signs of the rainfall it urgently needs to avoid the worst drought damage in nearly a quarter century.
As the majority of a near-record-size U.S. corn area is now set to enter the key phase of pollination, a period when hot and dry conditions can cause irrevocable damage, the lack of moisture threatens to extend a rally that has already propelled corn prices more than a third higher since mid-June.
"It is dry across much of the Midwest and Plains and there is no relief in sight," said Alan Reppert, senior meteorologist at AccuWeather.com. He said the most affected areas were from Iowa to Illinois, the heart of the Corn Belt.
Chicago Board of Trade (CBOT) December futures jumped 2.5 percent to $7.10-1/2 per bushel in opening Sunday night trade, touching a new contract high and reversing Friday's losses. Wheat and soybeans rose more than 1 percent.
"The good news for this week is that temperatures are due to slip back from last week's record readings, the bad news is that all of the rain forecast is for the southern third of the nation," ABN Amro analyst Charlie Sernatinger said in a note to clients.
He said Nebraska and Kansas had seen some rain over the weekend, but the eastern Corn Belt was unlikely to have any showers until the middle of next week, according to extended forecasts.
The latest U.S. Drought Monitor report, released on Thursday, showed drought encompassing more of the contiguous United States than at any other time since the report began in January 2000.
The blistering heat has begun to ease, however, with a slow-moving front of cool air from Canada starting to push down temperatures on Sunday from Minneapolis to Detroit to Pittsburgh.
The temperature in Chicago, which had three consecutive days of triple-digit temperatures in the past week, was a pleasant 82 degrees Fahrenheit (25 C) early Sunday afternoon, according to the National Weather Service.
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