Corn hits 3-month high on LatAm crop concerns, short-covering

SINGAPORE: Chicago corn climbed to its highest since early September on Monday with concerns that dry weather will hurt crop yields in Argentina underpinning the market.

Soybeans rose for a second session to highest in more than three weeks while wheat ticked higher, rising for four out of five sessions.

The Chicago Board of Trade most-active corn contract gained 0.3 percent to $3.59-3/4 a bushel by 0351 GMT. Earlier in the session, the market jumped to $3.60 a bushel, the highest since Sept. 7.

Soybeans rose 1 percent to $10.04-1/2 a bushel, the highest since Nov. 9 and wheat added 0.8 percent to $4.42 a bushel. The wheat market at intraday high of $4.42-1/2 a bushel was the highest since Nov. 22.

"Supply worries have entered the frame, both Argentina and Brazilian summer crop areas are facing significant weather stress," said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.

"These factors for now should help partially offset the slow start to US exports."

Dry weather across Argentina's farms is supporting corn and soybean prices.

Parts of Argentina's soybean and corn belt received some beneficial rains last week, but dry weather remains a concern across several provinces.

Brazil's corn production will drop by almost 17 percent in the 2017/18 crop cycle, consultancy Safras & Mercado said on Friday, reflecting a reduction in estimated planted area and lower prices for the grain.

Corn output will total 90.52 million tonnes, compared with a Safras estimate of 108.87 million tonnes for production in the 2016/17 crop season, the consultancy said.

Gains in corn and soybeans are likely to be capped by expectations of increase in US production next year.

US farmers are likely to expand plantings of both corn and soybeans while reducing wheat seedings for the upcoming marketing year, the US Agriculture Department said last week.

Large speculators trimmed their net short position in Chicago Board of Trade corn futures in the week to Nov. 28, 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, increased their net short position in CBOT wheat and switched to a net long position in soybeans.

Concerns over storms damaging Australian wheat crop eased after less than expected rains over the country's south-eastern region.

"The market's fears about several days of heavy rainfall in south eastern crop regions were clearly subsiding on Friday," Gorey said.

"And these regions seem to have received a lot less rain than was feared on Wednesday and Thursday last week."