SINGAPORE: Chicago corn rose more than 2 percent on Monday, rebounding from steep losses in the last session, while soy climbed to its highest since July 23 as poor rains over the weekend in the US crop belt threatened yields.
Wheat advanced 1.4 percent, underpinned by the gains in corn and soybean futures.
"There was rain expected over the weekend in some areas of the Midwest but they didn't get anything," said a Melbourne-based agricultural commodities analyst. "In addition, there are reports of some cooler weather pushing down through Canada that may increase the risk of frost in the medium term."
Chicago Board of Trade November soybeans rose 2 percent to $12.84-1/4 a bushel by 0334 GMT, while December corn added 2.1 percent to $4.73-1/4 a bushel.
Dry weather in parts of the US Midwest prompted worries over supplies as corn and soybean crops undergo their key yield-determining phase.
Warmer and drier weather will draw down soil moisture levels for crops which were planted late this year, hurting yields and renewing concerns over global supplies.
Importers are hoping for record US production to ease three years of tight grains and oilseed supplies.
Still, the market sees a better chance of rainfall by later this week in the central and northern US Midwest, which would benefit the kernel-filling corn crop and pod-setting soybean crop.
Strong demand for US soybeans is providing additional support to the market. Private exporters reported sales of 410,000 tonnes of US soybeans to China and unknown destinations for delivery in the new marketing year, the US Department of Agriculture said.
Large speculators increased their net short position in Chicago Board of Trade corn futures in the week to Aug. 13, regulatory data released on Friday showed.
The Commodity Futures Trading Commission's weekly commitments of traders report also showed that non-commercial traders, a category that includes hedge funds, trimmed their net short position in CBOT wheat and switched to a net long position in soybeans.
CME Group Inc, parent of the CBOT , lowered initial margins for agricultural commodity futures mostly across the board on Friday.
The exchange operator lowered corn futures initial margins for speculators by 25 percent to $2,025 per contract from $2,700. CME cut soybean futures initial margins for speculators by 11.8 percent to $4,050 per contract from $4,590.
The wheat market is being supported by strong gains in corn and soybeans. Spot-month wheat gained 1.4 percent to $6.39-1/2 a bushel.
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