CHICAGO (Dow Jones)--U.S. corn futures climbed Friday as private analysts renewed supply concerns by making deeper-than-expected cuts to their harvest forecasts.
Corn for December delivery, the most actively traded contract, surged 21 1/2 cents, or 2.9%, to $7.60 a bushel. Soybean and wheat futures also climbed at the Chicago Board of Trade.
Driving prices higher were fears the upcoming harvest will fall short of expectations due to intense heat and dryness this summer. Brokerage firm INTL FCStone fueled the concerns by cutting its corn output estimate 5% from last month to 12.35 billion bushels and its yield estimate 4.5% to 146.3 bushels an acre
A yield as low as FCStone's implies grain users need to reduce their demand to avoid a shortage of corn, said Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage in Iowa. That setback "can only happen with higher prices," he said.
Crop forecaster Lanworth had an even worse view of the crop, slashing its yield forecast to nearly 143 bushels an acre, according to traders. Lanworth, which has become known for using satellite imagery in its forecasts, declined to comment.
Both firms' outlooks are sharply below projections issued by the U.S. Department of Agriculture last month. Federal forecasters pegged estimated the corn harvest at 12.914 billion bushels, with an average yield of 153 bushels an acre.
Private analytical firm Informa Economics, a closely followed crop forecaster, will be the next company to update its harvest outlook. Informa is expected to release fresh forecasts Tuesday.
Reductions in private estimates have raised expectations the USDA will cut its crop forecasts in a monthly report due Sept. 12. Traders next week are expected to make bets corn prices will rise in anticipation of the report.
Corn futures have already climbed 19% this year on worries about tight supplies, with the market reaching a record high in June. Prices have since pulled back 6% from the all-time high.
"Extremely disappointing corn production prospects should be enough to push the market to new highs eventually," said Doug Bergman, a broker for MF Global in Chicago.
Soft red winter wheat for December delivery soared 14 1/2 cents, or 1.9%, to $7.75 1/2 a bushel. Soybeans for November delivery jumped 11 1/4 cents, or 0.8%, to $14.45 3/4 a bushel.
December soymeal finished up $1.50 at $385.00 per short ton, and December soyoil ended up 0.03 cents at 58.26 cents per pound. November rice advanced 26 cents to $18.22 1/2 per hundredweight. December ethanol climbed 5.2 cents to $2.752 per gallon, while December oats ended up 7 cents at $3.69 per bushel.
At the Kansas City Board of Trade, hard red winter wheat for December delivery gained 8 cents to $8.80 a bushel. Hard red spring wheat for December delivery rose 10 3/4 cents to $9.42 3/4 a bushel at MGEX in Minneapolis.