U.S. corn futures jumped Tuesday following up on last Friday’s rise as concerns increased about hot, dry weather hurting output in Argentina, the second largest exporter of the grain.
Corn for March delivery was $6.60 a bushel Tuesday morning at the Chicago Board of Trade. Soybean and wheat futures also were stronger.
Driving prices higher were forecasts for rising temperatures to add stress to crops in Argentina that have gone weeks without significant rains.
Conditions will stay dry during the next 10 days, said John Dee, president of Global Weather Monitoring. Temperatures will rise above 90 degrees F this week, with some areas likely reaching 100 degrees, he said.
"Hot and dry, that kind of says it all," Dee said.
Traders are focusing on Argentina's corn crop as it is approaching its key development period of pollination. They said extended dryness could reduce Argentina's production and shift export demand to the United States, the world's leading corn exporter.
The United States does not have a lot of extra corn on hand, with supplies as of Aug. 31 projected to drop to their lowest level since the mid 1990s, according to the USDA.
Yet, export sales showed a decline in demand. The USDA reported sales for the week ended Dec. 22 hit a six-week low of 345,200 tons.
Demand for U.S. corn did not perk up much last week due to the holidays and recent price gains, traders said.
Still, traders are keeping a close eye on weather forecasts. Argentine farmers have halted 2011/12 corn planting due to dry soils, the Buenos Aires Grains Exchange said, exacerbating worries that low supplies could fuel higher world prices.
Dryness is an increasing concern in southern Brazil as well.