US soyabean futures rose 1 percent on Thursday on short-covering due to dry weather in key crop areas of South America that could crimp production and boost demand for supplies from the United States. A weakening dollar helped agricultural commodities but corn and wheat settled lower due to concerns about poor demand for US supplies and abundant world stocks.
Worries about the South American soyabean crop dominated market talk. Brazil and Argentina are the world's second- and third-largest producers after the United States. "I think there is starting to be increased concern about a dry weather pattern developing in Argentina and southern Brazil," said Jim Hemminger, senior risk manager with Top Third Ag Marketing.
Chicago Board of Trade January soyabean futures ended up 11-3/4 cents at $11.11-3/4 a bushel. The 1 percent gain was the biggest daily increase in percentage terms in 2-1/2 weeks. "We have gotten to the point now where it has gone from being more of a speculative thing to perhaps more of a reality," said John Dee, meteorologist for Global Weather Monitoring.
"With each passing day of dry weather, it becomes more and more of a reality." CBOT March corn fell 1-3/4 cents to $5.79 a bushel and CBOT March soft red winter wheat ended down 1-1/2 cents at $5.79-1/4 a bushel. "The beans carried the corn, the beans carried the wheat with it (for much of the day)," said Dewey Strickler, president of AgWatch Market Advisors.
"But when you look at the exports, demand and so forth ... they do not warrant prices being up so at the end of the session. I think traders just more or less threw the towel in on the wheat and also the corn." Traders said some investors were unwinding long corn/short wheat positions, which was keeping pressure on corn despite supportive outside markets. Grains prices slumped on Wednesday in a heavy sell-off largely caused by a strengthening dollar, which could hit export sales of US grains. That coupled with fears that the euro zone debt crisis would slow global growth.
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