Ongoing droughts are expected to continue a rally in corn and soybeans in the coming week, according to Bloomberg.
Corn saw its largest two-day rally since 2010 early in the week after the U.S. Department of Agriculture announced significantly reduced estimates for corn and soybean crops in the Midwest, thanks to severe droughts.
"The current dryness in the U.S. Midwest will further reduce the crop yields and crop conditions," Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt, told Bloomberg. "Because of the earlier planting and speedy crop progress, the need for moisture is quite high."
After a mild winter and high prices led to extensive plantings, 2012 was expected to be a banner year for corn production, with the greatest amount planted since before World War II. However, major growing regions in Iowa and Illinois have seen half the usual amount of precipitation since last month. This led 20-out-of-29 analysts surveyed by Bloomberg predict a rise in corn, while 23-out-of-30 expect soybeans to rise.
At 2:59 p.m., corn rose 1 percent to $5.55 per bushel, while soybeans were up 0.09 percent to $13.725 per bushel.
Agriculture.com notes that, while the rise is positive for farmers, current trends are proving negative for all crops except wheat.