U.S. grains: Wheat, soy jump to multi-month highs on fund buying

Hard white winter wheat growing in North Carolina in 2010. (Dave Marshall photo courtesy ARS/USDA)

Chicago | Reuters — U.S. soybean and wheat futures extended gains to multi-month peaks on Tuesday, lifted largely by technical and investment fund buying, traders and analysts said.

Corn also rose at the Chicago Board of Trade, with all three agriculture future contracts gaining as part of a broad commodities rally. The dollar declined against a basket of currencies, making U.S. goods more attractive in global markets and further underpinning grain prices.

CBOT May wheat jumped 13-1/2 cents to $4.86-1/4 per bushel, its highest since Feb. 4 (all figures US$). The contract has gained 5.4 per cent this week, the biggest two-day rally since June.

Soybeans for May delivery surged about three per cent, or 31-1/4 cents, to $9.85-1/2 per bushel, the highest since Aug. 10. CBOT May soymeal notched even bigger gains, jumping 3.9 percent to $305.10 per ton.

CBOT May corn rose 3-1/2 cents at $3.84-1/2 per bushel, below their five-month high of $3.86 reached earlier in the session.

Investment funds were covering a portion of their record-large net short bet in CBOT wheat futures. Rains this month in Argentina slowed the soybean harvest and delayed export shipments, prompting some traders to extend long soybean bets.

“What we’re seeing is probably 75 per cent money flow, and 25 per cent concern with South America,” said Karl Setzer, analyst with MaxYield Cooperative in Iowa.

Port delays in Argentina were seen extending the U.S. soymeal export season while tight corn supplies ahead of harvest in Brazil were forcing some buyers to turn back to the United States for corn.

Wet weather was forecast next week in the northern half of Argentina, further threatening yields and delaying harvest, said Dan Cekander, analyst at DC Analysis LLC.

The U.S. Department of Agriculture earlier said exporters sold 241,516 tonnes of U.S. corn to unknown destinations, 380,000 tonnes of U.S. soybeans to Mexico, and 105,412 tonnes of U.S. soymeal to unknown destinations.

USDA late on Monday increased good-to-excellent condition ratings of the U.S. winter wheat crop and said U.S. corn seedings were 13 per cent complete, ahead of the five-year average pace of eight per cent.

Michael Hirtzer reports on agriculture and ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Gus Trompiz in Paris.

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