CHICAGO: US grains joined a broad commodities rally on Monday, spurred by an improved manufacturing indicator in China, but pared gains toward the final hour of trade as fund buying waned, traders said.
Soybeans led the way up on the Chicago Board of Trade, up about 1 percent, with wheat also rising. Lightly traded rough rice futures climbed the 50-cent limit on concerns about severe flooding in top exporter Thailand.
But corn backed off early gains and briefly turned lower on a mix of technical selling and concerns about the euro zone debt crisis.
Markets welcomed news China's manufacturing sector expanded moderately in October to snap three months of contraction, soothing fears of an abrupt slowdown in the world's second-largest economy.
The data allayed concerns China, the world's second-largest economy and top soy buyer, could be headed for a hard landing and helped to lift crude oil and copper prices.
Investors also initially warmed to progress made by European Union leaders on Sunday towards agreeing a new package to shore up the euro zone, but final decisions were left to a follow-up summit on Wednesday.
Uncertainty about the way forward for the EU appeared to be sidelining some investors.
"There are not enough details for anybody to have confidence yet," said Dan Basse, president of AgResource Co. in Chicago. He added, "Who really wants to invest until we have some confirmation of what the EU is going to do, and whether it's a credible plan or not?"
CORN HITS RESISTANCE
Corn futures advanced but encountered chart-based resistance above $6.60 per bushel, a level that appeared to trigger selling by funds as well as a few farmers.
"Corn is having a tough time at this $6.62-$6.63 level. That used to be our support when we were trading at $7, but now it's going to be a resistance level," said Mark Schultz with Northstar Commodity in Minneapolis.
"You just don't have people chasing the market to the upside any more. It's not like the summer market where there is that possibility of a weather problem," Schultz said.
Hedge-related selling was a factor after US farmers in a few areas unloaded some of their newly harvested corn over the weekend.
"I think guys saw some pretty good corn movement on Saturday. Some saw their biggest day this fall buying corn," said Dan Cekander, analyst with Newedge USA.
As of 12:30 p.m. CDT (1730 GMT) at the Chicago Board of Trade, November soybeans were up 12-1/4 cents, or 1 percent, at $12.24-1/2 per bushel.
December corn was up 3-3/4 cents at $6.52-3/4 a bushel and December wheat was up 7 cents at $6.39 a bushel.
Traders were awaiting a weekly crop progress report from the US Department of Agriculture later on Monday to see if harvesting continued to advance rapidly last week. Early last week the USDA said the corn harvest was 47 percent complete and soy was 69 percent complete.
Traders expect the USDA to show corn harvest 65 to 70 percent complete and soybean harvest 80 to 85 percent done when it issues a weekly report on Monday.
Comments
Comments are closed for this article.