LONDON, June 3 (Reuters) – U.S. soybean futures climbed to a two-year high on Friday as renewed rain in Argentina heightened concerns about crop losses in the world’s number three producer.
Wheat prices also rose as heavy rains dented crop prospects in western Europe while corn futures were supported by a diminished outlook in Brazil following a drought.
July soybeans on the Chicago Board of Trade were up 1.6 percent at $11.62 a bushel at 1031 GMT after earlier rising to a peak of $11.63-1/4, the highest level for the most active contract since June 2014.
Rains this week in Argentina’s top agricultural province, which was previously unaffected by recent wet weather, may further damage the 2015/16 soybean harvest, the Buenos Aires Grain Exchange said on Thursday.
“There is possibility of further upside potential in soybeans as there is big dent in South American production and if the United States has below average crop conditions,” said Phin Ziebell, agribusiness economist at National Australia Bank.
“Having said that millers would be looking to replace soymeal with other sources of protein.”
Chicago soybean futures are on track for an eighth consecutive week of gains and concerns are emerging that the run-up may have been overdone.
“We now regard the extent of the latest price rise to be excessive,” Commerzbank said in a market note on Friday.
Wheat edged up in Chicago and Paris as heavy rain threatened to reduce crop quality in the United States and Europe.
The condition of cereal crops in France worsened again last week, farm office FranceAgriMer said on Friday, in a sign that heavy rain is affecting crops in the European Union’s largest grain producer.
“Current weather in parts of Europe is not favourable, with wet conditions across much of France and Germany moving east into the Balkans and southern Russia,” David Sheppard, managing director of UK merchant Gleadell said in a market note.
“This, together with forecasted warmer temperatures, could increase disease potential in crops.”
September wheat in Paris rose 0.6 percent to 168.75 euros a tonne while July wheat in Chicago was up 0.4 percent at $4.87-1/4 a bushel.
Corn prices also rose, supported by crop losses in Brazil.
CBOT July corn rose 0.6 percent to $4.17-3/4 a bushel. The most active contract peaked at $4.19-1/2 on Thursday, its highest level since July 2015.