LONDON - U.S. corn rose 2.0 percent on Monday and soybeans gained more than 1 percent as funds extended net long positions and as severe drought in Brazil and rains in Argentina curbed global supplies.
The Chicago Board of Trade most-active corn contract was up 2.0 percent at $4.31-1/2 a bushel by 0952 GMT.
Soybeans added 1.1 percent to $11.91 a bushel after peaking on Friday at a two-year high of $12.08-1/2.
Corn and soybean markets have been climbing since April due to a severe drought that has hit Brazilian corn production and on heavy rains that have swamped Argentina's soybean crop.
Domestic supplies of corn and soybeans will be tighter than expected in the United States as problems with crops in Brazil and Argentina have raised export demand for U.S. supplies, the U.S. Department of Agriculture said on Friday.
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In its monthly supply and demand report, the government cut its new-crop and old-crop ending stocks outlooks for corn and soybeans by more than analysts had forecast.
"Funds are continuing with their bullish bets on corn and soybean markets," said Kaname Gokon at brokerage Okato Shoji in Tokyo.
"The USDA has cut its estimates for ending stocks as there is strong demand for U.S. products."
Large speculators raised their net long position in Chicago Board of Trade corn and soybean futures in the week to June 7, regulatory data released on Friday showed.
The market will focus now on what the USDA will say on June 30, when it releases its estimates for U.S. quarterly grain stocks and planted acres. It will also keep a close eye on the weather that could threaten recently planted U.S. corn and soybean crops.
Dealers said USDA was expected to lower its U.S. corn area estimate in the June 30 report and raise soybean plantings.
"A 2 million to 4 million acre increase in soybean area would bring another 90 million to 200 million bushels of soybean supply," Rabobank said in a market note.
Wheat futures were also higher with CBOT July up 0.9 percent at $4.99-1/4 a bushel. September wheat in Paris rose 1.0 percent to 170.25 euros a metric ton.
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Dealers said the strength of corn prices could boost demand for wheat from the feed sector although the scope for any major rally continued to be capped by plentiful supply.
