Grains rose to fresh multi-week highs early on Tuesday, as encouraging economic signs from Europe improved investor sentiment, while dry conditions threatened South American corn and soya yields. The grains extended overnight gains and got support from a weaker US dollar, which helps US commodities trade more competitively in the export market, and sharply higher crude oil and equities.
"I think the South American weather play was yesterday - this morning had more of a macro feel to me," said Roy Huckabay, analyst at The Linn Group in Chicago. Chicago Board of Trade January soyabeans rose 11-1/2 cents or 1 percent to $11.48-1/4 a bushel by 9:47 a.m. CST (1547 GMT), while March corn gained 6-1/2 cents or 1.1 percent to $6.07-3/4 a bushel.
Soyabeans and corn touched highs of nearly four and three weeks respectively. March wheat added 7-3/4 cents or 1.3 percent to $6.07-1/2 a bushel, touching a two-week top. Needed rains are due to enter Argentina's and southern Brazil's drought-stressed soya and corn fields in the coming days, in what farmers hope will be temporary relief from the dry weather hitting the region, forecasters said on Tuesday.