By Jesse Newman
CHICAGO--Grain futures advanced to fresh multimonth highs amid a sharp drop in the U.S. dollar and ongoing short-covering in corn and wheat markets. Soybeans fell.
Wheat prices led the gains, climbing to a more than four-month high as the dollar tumbled 1% against a basket of international currencies on Thursday. A weaker greenback is friendly for wheat prices because it makes U.S. crops less expensive for foreign importers at a time when U.S. farmers are relying on overseas buyers to soak up a portion of their recent huge harvest.
Growing optimism among speculative investors that the wheat market will swing higher in the near-term also benefited prices, as it prompted some traders to close out of bearish wheat bets, which boosted the market. One analyst said traders were exiting bets on lower prices in part due to speculation that the U.S. Department of Agriculture next week will project at least a 15% decline in winter wheat plantings this season, suggesting a smaller summer grain harvest.
Wheat futures for March rose 7 3/4 cents, or 1.9%, to $4.26 1/4 a bushel at the Chicago Board of Trade, the highest closing price since Aug. 19.
Corn prices advanced to a new, more than five-month high amid continued short-covering. Although large investors jettisoned bearish corn bets Thursday, analysts said an uptick in farmer selling kept corn's gains in check. Prices for have improved for five straight days, encouraging some growers to market their crops to take advantage of higher prices.
CBOT March corn added 1 1/2 cents, or 0.4%, to $3.61 1/4 a bushel, the highest closing price since July 14.
Soybean pricesdeclined, buffeted by slow demand and profit-taking by traders after prices surged 2% on Wednesday. Analysts also said excess rainfall in parts of Argentina also failed to generate more concern over world soybean production, as traders are waiting to see whether better yields in that country's drier regions make up for areas of flooding.
A softer dollar stemmed losses in the soybean market, however. CBOT January soybeans fell 2 3/4 cents, or 0.3%, to $10.03 1/2 a bushel.
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(END) Dow Jones Newswires
January 05, 2017 15:39 ET (20:39 GMT)
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