CHICAGO: Corn prices rose to a one-week high on Wednesday on a mix of technical buying and prospects for improved US export demand as old-crop supplies from South America dwindle, analysts said.
Wheat advanced, halting a four-day sell-off, and soybeans rose for a second day, joining a broad rally in commodities tied in part to end-of-the-month buying.
At the CBOT, December corn settled up 14 cents, or 1.9 percent, at $7.55-3/4 per bushel. December wheat ended up 7-3/4 cents, or 0.9 percent, at $8.64-1/2 per bushel and benchmark January soybeans settled up 12-1/4 cents, or 0.8 percent, at $15.48-3/4 a bushel.
Corn rose on signs that cash offerings of corn from Argentina and Brazil were diminishing, potentially shifting export business back to the United States.
"South American grain prices have been rising over the last two weeks," said Ken Smithmier, an analyst with the Hightower Report in Chicago. "There is a glimmer of hope here for the bulls that maybe South Korean and Japanese demand that has been shifted to South America, might come back here pretty soon."
Analysts also noted concerns about planting delays in South America that could prompt some producers to switch some corn acres to soybeans. A local analyst in Argentina on Tuesday said the country could lose up to 20 percent of its corn production for 2012/13 due to excessive rains and flooding.
Chart-based buying added support. CBOT December corn hit a one-week high at $7.57-3/4 a bushel, gaining momentum by staying above its 100-day moving average. The contract dipped below the 100-day average on Monday for the first time since June, but has settled above it each day this week.
EGYPT BUYS WHEAT
Wheat rose on news that Egypt, the world's biggest wheat importer, purchased a total of 300,000 tonnes of wheat from Romania, Russia and France.
"We had a reminder the world is still hungry, with Egypt buying 300,000 tonnes of wheat," said Rich Feltes, vice president of research for R.J. O'Brien, although he noted that none of the wheat was of US origin.
Analysts noted ongoing concerns about tightening global supplies of wheat, given excessive rain in Argentina and poor yields in Australia. Argentina's Rosario grains exchange on Tuesday projected the country's wheat production at 10 million tonnes, below the US Department of Agriculture's latest forecast for Argentina at 11.5 million.
Like corn, CBOT December wheat attracted technical buying by staying above its 100-day moving average near $8.58. The contract traded below that average on Tuesday for the first time since June, but settled just above it.
Additional support stemmed from ideas that rain and snow in Ohio this week could limit plantings of soft red winter wheat, the type traded in Chicago.
"We need some drier weather in the soft red areas, the Ohio River Valley, where we saw some snow as a result of the hurricane. That could deter some farmers from going ahead with wheat plantings," said Shawn McCambridge, grains analyst with Jefferies Bache.
After the close of the market, the US Department of Agriculture said Ohio farmers had planted 82 percent of the state's winter wheat crop, compared to the five-year average of 88 percent.
Nationally, in its first winter wheat condition ratings of the season, USDA said 40 percent of the US winter wheat crop was rated in good to excellent condition, down from 46 percent a year ago.
USDA's weekly report was released two days later than normal due to federal office closing this week for Hurricane Sandy.
SOYBEANS
Soybean futures rose for a second day on technical buying, continued talk of demand from top soy buyer China and concerns about planting delays in South America.
Hamburg-based oilseeds analyst Oil World on Tuesday had cautioned that rain delays could reduce soy plantings in Brazil and Argentina, both of which are projected to produce record-large crops this year.
Later soy plantings could translate to a later harvest, creating a longer time period in early 2013 when the United States dominates as the world's soybean supplier, as buyers wait for the first Brazilian soybeans to reach marketing channels.
Gerlach also said traders appeared to be covering short positions in soybeans following a 2.2 percent decline on Monday that put the market on pace for a slight decline for the week.
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