US wheat, corn climb

US wheat prices jumped 3.4 percent on Tuesday, their biggest daily rise in a month, as a weaker dollar coupled with strength in crude oil and US equity markets sparked a short-covering rally. Corn rose 1 percent. Soyabeans closed firm but ended below the day's highs.
The dollar fell against the euro for a second day, spurring buying in grains, as Italy's successful completion of its closely watched bond auction calmed fears about eurozone debt issues. "There is still optimism on Europe, even though we are far from a plan," said Dan Cekander, grains analyst with Newedge USA in Chicago.
Weekly commitments data from the US Commodity Futures Trading Commission showed that non-commercial traders, a category that includes hedge funds, raised their net short position in Chicago Board of Trade wheat in the week to November 22 to the widest level since at least January 2006. The report also showed that large speculators pushed their net short in CBOT soyabeans last week to the highest level since July 2010. Non-commercial traders still held a net long in CBOT corn, but it was the smallest since July 2010.
Some analysts said uncertainty about the debt situation in Europe ahead of an EU summit on December 9 appeared to be prompting investors to shed risk by exiting the grain markets. "Ahead of the December 9 European summit, I think people are all trying to get smaller on their positions," said Dan Basse, president of AgResource Co in Chicago. On Monday, open interest fell by nearly 13,000 contracts in CBOT wheat and nearly 68,000 contracts in corn after a session in which both markets closed higher. The data indicates that traders were liquidating short positions.
On Tuesday, most-active March wheat settled up 23 cents, or 3.9 percent, at $6.16 per bushel. The spot December contract ended up 19-3/4 cents, or 3.4 percent, at $5.94-1/2. March corn rose 7 cents to $6.05-1/2 a bushel. January soyabeans settled up 4 cents, 0.4 percent, at $11.25 a bushel, more than 13 cents below its intraday high of $11.38-1/2.
Traders said soyabeans retreated on technical selling toward the close after January contract failed to reach $11.42, a retracement level from last week's drop to $11.02-3/4, a 13-month low. Tuesday's short-covering move in wheat drove news of improving US wheat crop ratings into the background. The US Department of Agriculture late Monday said 52 percent of the crop was rated good to excellent, up from 50 percent a week earlier and 47 percent a year ago.