Soyabeans and wheat rise

US soyabean futures rose on Tuesday as forecasts for poor crop weather in South America boosted prospects for US supplies on the export market and provided an opportunity for traders to cover short positions. Wheat futures also were supported by short covering and gained 1 percent as traders unwound bearish positions in a market that fallen 11 percent in the past month.
The gains in soyabeans and wheat dragged corn higher, bucking pressure from a firm dollar that normally cuts demand for US commodities. "We are hearing issues with the South American weather forecast," said Brian Hoops, president of Midwest Market Solutions, a brokerage and commodity marketing advisory service. "They have got the driest 10-day period of the entire year coming up. If production is curtailed in South America at all, demand from China should return to the United States for soyabeans."
The La Nina weather phenomenon is expected to reduce rainfall in Argentina's main crop belt until at least January, hurting crop yields in the world's third-biggest soyabean exporter, forecasters said. Volume was the lowest of the year for corn and wheat but trading activity in soyabean futures was better than average.
Chicago Board of Trade January soyabean futures settled up 6-1/2 cents to $11.18-1/2 a bushel. Large speculators took on a net short position in CBOT soyabeans for the first time in 16 months in November as South America took a leadership position in the export market.
CBOT March corn rose 1/2 cent to $5.94-1/2 a bushel. The front-month December contract, which expires this week, gained 3 cents to $5.88-1/2 a bushel. CBOT March soft red winter wheat was up 6-1/4 cents to $6.00-1/2 a bushel. "I think a lot of people that have been short wheat are beginning to cover those short positions," said Al Kluis, president of Kluis Commodities, a market advisory service. "Some of the people that made a lot of money in the short side, I would think they would want to take it between now and the end of the year."
Corn lagged soyabeans and wheat as most investors still had bullish positions on that commodity. "It seems as though funds are more short the wheat and they are a little bit more short the beans," said Mike Zuzolo president of Global Commodity Analytics and Consulting. "There is plenty of length already (in corn)."