Grains climb to fresh highs

Grains extended their pre-holiday runs higher Thursday, as investors covered short positions and anticipated a resumption of stressful crop weather in South America next week. Soybeans extended their streak of gains to six days - the longest such string in five months - while corn and wheat stretched their rallies to five days.
The late-year rally has pared what are shaping up to be losses across 2011 for all three, with soybeans on course for a 17 percent drop, wheat heading for a 22 percent drop and corn on pace for a 2 percent decline. Grains were underpinned by slight weakness in the dollar and strength in crude oil and equities, as investors took comfort in data showing new US jobless claims hit a 3-1/2 year low.
"There's a calming going on in Europe, nothing too dramatic today (so) attention has shifted back to the weather," said Bill Nelson. Crops in parts of far southern Brazil should get welcome rains Friday and Saturday but dry weather returns next week, which could stress the region's corn and soybeans, a US forecaster said. Updated forecasts at midday Thursday looked wetter for Rio Grande do Sul, a key soybean state.
Meanwhile, farmers in Brazil's largest soy producing state, Mato Grosso, are days away from beginning the harvest of record corn and soy crops. Corn and soybeans got further support from higher-than-forecast weekly net export sales reported by the US Department of Agriculture on Thursday of 952,900 and 728,400 tonnes respectively.
Chicago Board of Trade January soybeans rose 8-1/2 cents or 0.7 percent to $11.62-1/4 a bushel, touching a one-month high. Soybeans' winning streak came as open interest dropped, which with funds holding a net short position, suggested they are covering.
March corn gained 1 cent to $6.17-1/2 a bushel, falling well off its five-week high earlier in the session. CBOT wheat for March delivery gained 4-3/4 cents or 0.8 percent to $6.21-3/4 a bushel, touching its highest price in five weeks, on technical strength and short-covering.
With holidays approaching, corn volume fell to less than two thirds of its normal activity during the past 30 days, while wheat volume dropped nearly by half from its 30-day average. Soybean trading was relatively robust, with slightly more activity than the average of the past 30 days.