Weather and Crop Damage Drive Grains and Oilseeds Higher

Grain and oilseed markets rallied on Monday as an outlook for warmer and drier weather conditions across the Corn Belt supported buying. In addition to the weather forecast, traders are also coming to the conclusion that the storms in Iowa and Illinois last week may have significantly reduced the size of the corn and, to a lesser extent, soybean crops, which also contributed to the bullish tone.

Corn futures rose about two percent (December contract + 6 3/4 cents per bushel) to settle at the highest level since July 9. Futures rallied steadily throughout the day to end trading just below the highs as estimates of the damage to the crops in Iowa and Illinois circulated. The recent rally has triggered short-covering by funds, which also contributed to the strength in the move higher on Monday. The move higher…