By Nigel Hunt

"I think we are definitely going higher. There is no let up either on the demand or supply side...," said analyst Sudakshina Unnikrishnan of Barclays Capital in London.

Front month July corn on the Chicago Board of Trade rose to a contract high of $7.57-3/4 a bushel, up more than 3.5 percent from Friday's close, while July 2009 soared to an all-time peak of $8.07.

Corn prices have jumped by one quarter this month and are up 90 percent from a year ago, prompting renewed concern about food price inflation with the crop a staple for both humans and livestock in many regions of the world.

The United States is by far the world's largest producer of corn and flooding has been most devastating in the leading corn growing state, Iowa.

Stocks of corn have already fallen sharply with the decline driven partly by increasing use of the crop in the U.S. to produce biofuel ethanol.

Last month, the International Grains Council forecast U.S. corn closing stocks at the end of the next crop year in August 2009 would be 20.0 million tonnes, down sharply from 35.1 million a year earlier.

ROBUST DEMAND

"The demand side has been fairly robust but the latest push higher has definitely come from the supply side. Clearly weather is in the driving seat at the moment," Unnikrishnan said.

Soybean, wheat and rice prices also rose on Monday.

CBOT July soybeans rose to a peak of $15.83-3/4 a bushel, just short of a contract high of $15.96 set in early March, and up about 15 percent from a month ago.

U.S. Midwest states such as Iowa are key producing regions for both corn and soybeans and there had been fears that delays to planting corn would boost the area for later-sown soybeans.

"The belief earlier was there would be a rebound in soybean plantings at the expense of corn but you are now seeing the weather affecting soybeans as well," Unnikrishnan said.

Wheat prices also rose on Monday, boosted by expectations that soaring prices for corn may lead to some substitution in the feed sector and concern that adverse weather in the U.S. Midwest could also damage wheat.

CBOT July wheat rose to a peak of $8.97-3/4 a bushel, up 1.8 percent from Friday's close of $8.82.

Prices for wheat, corn and rapeseed were also higher in European futures markets with higher crude oil providing additional support.

"We follow Chicago and crude oil. Weather conditions should improve in the U.S. in the second half of the week, and we hope they will. In the meantime, it's likely U.S. corn will test $8 per bushel," a European trader said.

November wheat futures in Paris rose 6.75 euros to a peak of 215.75 euros, its highest level since early April.

Wheat prices, however, remain far below record highs set earlier this week, depressed by the prospect of a record global crop this year.

CBOT rice also rose with July up 0.50 cents to $20.80 per hundredweight.

(Additional reporting by Miyoung Kim in Seoul and Valerie Parent in Paris)

(Reporting by Nigel Hunt; Editing by Peter Blackburn)