Corn and soybean futures spiked higher overnight amid hot and dry weather expected this week. New crop December corn futures gapped open higher on the open, trading 9.25 cents higher before giving back some gains through the morning session.

November soybeans traded more than 15 cents higher overnight, topping $12.07 before giving back half of their gains.

Large speculators have been covering their short positions since hotter and drier weather returned to the forecast. Last week’s WASDE report is also providing some support.

Weather forecasts are set up for a drier-than-average pattern this week, with much of the Corn Belt expected to receive less than a half an inch of rain over the next 10 days, according to Eric Snodgrass with Nutrien Ag Solutions.

“Our focus is on the Corn Belt this week where the ridge responsible for the aforementioned heatwave will block moisture and rainfall chances for a wide and productive growing region,” according to Snodgrass. “A persistent dry stretch, lasting 7 to 10 days, just after pollination will likely steal some yield potential from the crop.”

The U.S. Corn Belt is expected to receive just 22 percent of its average precipitation over the next week. The same region is expected to receive just 60 percent of its normal precipitation in the extended forecast.

Corn conditions have remained fairly stable this growing season, though disease pressure and upcoming flash drought risks could limit yield potential for areas with little moisture reserves.
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