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Corn hits 1-week high after USDA pegs condition below estimates

U.S. corn futures rose 1% on Tuesday to a one-week high after the U.S. Department of Agriculture said the condition of the crop was lagging market expectations, fuelling fears that bumper crop forecasts may not materialise.

Soybeans edged higher while wheat rose nearly 0.5%, tracking strength in corn.

The most active corn futures on the Chicago Board Of Trade were up 1% at $3.26 a bushel by 0401 GMT, near the session high of $3.26-1/4 a bushel – the highest since Aug. 4. Corn gained 0.7% in the previous session.

Analysts said the USDA crop condition report was driving corn higher.

But Tobin Gorey, director of agriculture at the Commonwealth Bank of Australia, said gains would likely be temporary.

“Down just a percentage point from last week, the drop is probably not enough to lift the gloom in the corn market,” Gorey said.

The USDA on Monday rated 71% of the U.S. corn crop as good to excellent in a weekly progress report, down 1 percentage point from a week ago and below an average of trade expectations.

The USDA will on Wednesday issue its latest World Agricultural Supply and Demand Estimate, which is expected to show plentiful supplies of U.S. grains.

The most active wheat futures were up 0.5% at $4.93-1/2 a bushel, having closed down 0.9% on Monday, when prices hit the July 6 low of $4.90 a bushel.

The most active soybean futures were up 0.1% at $8.74-1/2 a bushel, having firmed 0.7% on Monday.

Soybean ratings improved to 74% good to excellent, up 1 point from the previous week, bucking trade expectations for a 1-point decline.
Source: Reuters (Reporting by Colin Packham; Editing by Aditya Soni)

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