US wheat futures rose 1.3 percent on Tuesday, their second straight day of gains, due to concerns about the poor condition of the just-planted winter crop in the United States and weather trouble in major exporters Australia and Argentina. Soyabean futures also rose, bouncing back from two down days that saw prices fall 3.6 percent. Soyabeans have tumbled more than 1 5 percent from the record they hit in early September, but found support near $15 a bushel.
Corn markets also were firm, supported by the strong gains in soyabeans and wheat. Traders were expecting an increase in demand for US wheat amid production problems in Australia and Argentina, and tightening supplies in Black Sea countries such as Ukraine. US wheat export prices were becoming more competitive as well, the traders said.
"I have noticed that recently the US has been a little bit uncompetitive in the market against other suppliers but that gap has narrowed and there is an expectation for increased demand for US wheat," Greg Grow, director of agribusiness at brokerage Archer Financial Services. Chicago Board of Trade December soft red winter wheat settled up 11 cents at $8.77 a bushel, its highest close in nearly two weeks. Wheat broke through resistance at its 50-day moving average late in the day and closed above that key technical point for the first time since October 24. CBOT January soyabeans were 1 2-1 /4 cents higher at $15.15 -1/2 a bushel and CBOT December corn was up 5 cents at $7.43 a bushel.
"Soyabeans had been oversold so there is some bargain buying," said Sterling Smith, futures specialist with Citigroup. "The $15 area has definitely proven to be a solid line in the sand, they don't want it below that level." The $15-a-bushel level represented a 62 percent Fibonacci retracement of the summer rally that pushed soyabeans to an all-time high of $17.94-3/4 a bushel.
Despite the gains, prices for all three commodities were expected to stay inside recent trading ranges due to uncertainty over the outcome of Tuesday's US presidential election and a monthly US Agriculture Department supply and demand report on Friday. Weekly US crop ratings showed a record low for winter wheat at this point of the season, as dryness continued to hamper key growing states. Adverse weather also continued to raise uncertainty about wheat harvests in Argentina and Australia.