Corn and soya climb to multi-week highs

Corn and soyabeans rose to multi-week highs Monday as South American weather threatened to cut yield potential. Wheat also gained on spillover support from corn, as grains shrugged off pressure from weaker equities and the resurfacing of worries about the eurozone's debt crisis.
Fields in parts of Brazil, which is set to supplant the United States as the world's top soybean exporter next year, and in Argentina, the No. 3 shipper, need more rain, while rising temperatures forecast for this week could stress crops. "You've got the outside markets and the currency in particular allowing the weather to come in and trade the price action again," said Mike Zuzolo, president of Global Commodity Analytics in Lafayette, Indiana. "And that's something we haven't had for the last 60 to 75 days."
Southern Brazilian and Argentine soy areas are in line for isolated showers later this week but are not expected to break the cycle of hot weather that has been drying out the South American grain crop, forecasters said. Chicago Board of Trade March corn gained 18 cents or 3.1 percent to $6.01 a bushel, touching a more than two-week high.
"The South American weather situation is more of a problem for corn than beans because it's occurring in southern Brazil and Argentina," said Terry Reilly, analyst at Citigroup in Chicago. "Corn is already planted and you've got some producers ripping up some fields and planting beans." Spreading also benefited corn, as some investors bought the grain and sold soyabeans, Reilly said. Higher than expected export volumes in inspection data from the US Department of Agriculture added further support for corn, he said.
January soyabeans rose 7 cents or 0.6 percent to $11.37 a bushel, touching the highest price in nearly four weeks. Any decline in corn and soybean production in Brazil and Argentina could benefit exporters in the United States, who have been hampered by relatively high prices.
Chicago March wheat climbed 16 cents or 2.7 percent at $5.99-3/4 a bushel, with short-covering and on spillover support from corn. The grains are linked through their common use as animal feed. Traders wanting to cover shorts or add to long positions were likely to do it on Monday and Tuesday, Zuzolo said, before volumes thin more drastically ahead of the Christmas holidays.