US grains jumped on Thursday, with corn and soyabeans climbing to a two-week high, as the dollar weakened, top global commodities buyer China cut interest rates and hot weather threatened to reduce yields in the United States. "It's a combination of the weather, extreme tightness in cash grains on both beans and corn, and the bullish tailwind of the outside markets," AgResource Co analyst Dan Basse said.
"The weather is the most threatening. We need regular and significant rainfall before corn goes into pollination," Basse said. At the Chicago Board of Trade, new-crop December corn led the way higher, surging more than 3 percent for its biggest daily gain since October. New-crop soyabeans also gained 3 percent, the largest one-day increase since March.
Hot and dry weather in the United States could take the edge off what the US Department of Agriculture forecasts to be a record-large corn crop. Analysts polled by Reuters predicted the USDA would cut the winter wheat harvest by 3.2 percent in a closely watched supply-and-demand report due next Tuesday, the first such report to be released during the new 21-hour trading schedule at the CBOT.
CBOT July soyabeans settled 41-3/4 cents higher at $14.28 per bushel after China, which imports roughly two-thirds of global soya exports, cut interest rates for the first time in four years in an effort to boost economic growth. Corn for July delivery ended 7-3/4 cents higher at $5.94 per bushel and CBOT July wheat rose 17-1/2 cents to $6.41-3/4, a nearly one-week high.
Scattered showers are expected in the US Midwest corn and soyabean growing area over the next couple of weeks but the rains will miss a large portion of the crop belt, an agricultural meteorologist said. "There's a rain event in the Midwest that's supposed to be happening Sunday and ending Tuesday. That's going to be a closely watched rain event and if it does not meet expectations, the market will be extremely nervous," Citigroup analyst Sterling Smith said.
The dollar sank to its lowest in more than a week against a basket of currencies, making commodities priced in the greenback more attractive to importers, in advance of US Federal Reserve Chairman Ben Bernanke's testimony in Washington. Grains held their gains, however, with additional support from an Argentine farmer strike and China's rate cut.