* New-crop soy rises for 3rd session
* Slumping dollar helps grains
* Pro Farmer tour inspects crops in Indiana, Nebraska
* Market needs higher prices to curb demand
By K.T. Arasu
CHICAGO, Aug 21 Soybeans rallied nearly 3
percent on Tuesday to hit another peak, while corn rose nearly 2
percent on evidence of decimated crops amid the worst drought in
half a century and a need to temper demand through even higher
Corn and soybean futures at the Chicago Board of Trade
resumed their climb after a setback last week, making a push to
retest record highs as money managers bet that end-users would
scramble for the dwindling supplies.
Chicago wheat rose more than 2 percent in tandem with corn
and soybeans and on a sharp drop in the dollar on growing
expectations that European officials will put together a plan to
tackle the region's debt and economic crisis.
"The dollar is part of the trading equation today," said
futures specialist Sterling Smith of Citigroup in Chicago.
Mark Kinoff, president of Ceres Hedge in Chicago, said
investors holding short positions in the market were being
flushed out by bullish investors.
"The guys who are long this market are the fund managers,
while end-users are not well covered," Kinoff said.
The Pro Farmer tour, an eclectic mix of crop forecasters,
grains analysts, farmers and journalists, kicked off on Monday
and early findings confirmed trade expectations that the crops
will be smaller than currently forecast by the government.
But on Tuesday, the tour found slightly better-than-expected
corn yield counts in central and north-central Indiana and in
south and eastern Nebraska, contrasting with poor yields in Ohio
and South Dakota on Monday.
In Nebraska, where fields are extensively irrigated, scouts
pegged the corn yield at 178.8 bushels per acre after inspecting
eight fields, up from last year's 153.7 bushels.
Soybean pods averaged 869.6 per three-foot square, below the
1,286.5 pods of last year.
"It feels good to be in some good corn," Pro Farmer Editor
Chip Flory said on the Nebraska leg of the tour.
Corn yields after the first four tour stops on one Indiana
route across Huntington, Wabash and Whitley counties were
estimated at 137.07 bushels per acre, above the 134.02 bushels a
year ago. The soybean pod count was 1,628.48, better than last
The tour will announce its national yield and production
estimates on Friday.
Chicago Board of Trade new-crop November soybeans rose
2.9 percent to end at $17.32-1/2 a bushel, having hit a new
contract high of $17.34.
December corn rose 1.8 percent to end at $8.38-3/4 a
bushel, the highest since Aug. 10. The contract was at the cusp
of being technically overbought based on the Relative Strength
Index, which stood at 69.4, just short of the start of
overbought territory at 70.
December wheat rose 2 percent to end at $9.22 per
The corn yield in Ohio was projected at the lowest level in
10 years after severe drought and hot temperatures sapped the
crop during its most vulnerable period of pollination, scouts on
the tour found.
The yield in the No. 8 corn-growing U.S. state was estimated
at 110.5 bushels per acre, sharply below the U.S. Department of
Agriculture's estimate earlier this month of 126.0 and the
three-year tour average of 160.5.
In South Dakota, scouts came across field after field where
corn had been harvested for silage to feed on-farm cattle -
which means less corn being harvested for grain.
The U.S. corn harvest got off to its earliest start ever
last week as early planting last spring and a hot summer
accelerated crop development, the USDA said in a report.
Four percent of the crop was harvested as of Sunday,
according to the weekly crop progress report released after the
market closed on Monday.
In Europe, milling wheat futures were also higher with
front-month November rising 1.8 percent to end at 267.75
euros a tonne, its highest level since Aug. 10.