By Jesse Newman
CHICAGO--Grain and soybean futures rose Wednesday, buoyed by a fresh wave of buying and investor short covering in agricultural markets.
Prices for soybeans gained 2%, pushing back above the $10 a bushel level after dropping to a seven-week low in the previous session. Buyers entered the soybean market as uncertainty over world weather lingered and outside markets were friendly. Although growing conditions in South America are largely favorable, analysts say traders are keeping an eye on areas of excess dryness in Brazil and flooding in Argentina, with some betting that prices will rise if production problems develop there, curbing South American supplies.
"South Americanweather is one of the leading fundamental influences on the market at the present time," said Karl Setzer of brokerage MaxYield Cooperative.
Higher prices for crude oil as well as a weaker U.S. dollar also benefited soybean prices, with the dollar pulling back from a more than 14-year high notched on Tuesday. A softer dollar typically makes farm goods like soybeans more attractive to foreign buyers.
Soybean futures for January advanced 19 1/2 cents to $10.06 1/4 a bushel at the Chicago Board of Trade.
Corn prices shot to a more than five-month high as large investors bailed out of bets that prices will fall in the short term, which lifted the market. Speculative investors like hedge funds and others are holding a sizeable net-short position in the corn market, but analysts said some were exiting those bets because bearish fundamentals like huge corn supplies are well-known and fresh buying could push prices higher later in the month.CBOT March corn climbed 4 cents, or 1.1%, to $3.59 3/4 a bushel, the highest closing price since July 14.
Wheat futures gained to a more than two-month high, bolstered by investor short-covering as well as poor ratings for U.S. winter wheat crops. Analysts said government data showed crop conditions have deteriorated in wheat-growing states like Kansas and North Dakota. Although plants are lying dormant for the winter, dry conditions still are threatening to harm crops in the U.S. southern Plains.
CBOT March wheat futures rose 12 cents, or 3%, to $4.18 1/2 a bushel, the highest closing price since Oct. 19.
Write to Jesse Newman at firstname.lastname@example.org
(END) Dow Jones Newswires
January 04, 2017 15:54 ET (20:54 GMT)
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