US soy, wheat rally to multiyear highs as dryness persists

CHICAGO: US wheat and soybean futures jumped more than 2pc to multiyear highs on Tuesday, supported by concerns about dry weather in key production areas, traders said.

Corn futures hit their highest level in 8-1/2 months, joining in the broad-based rally as the pace of the US harvest fell below expectations despite near-perfect weather for field work.

The dry conditions in South America could boost already-robust demand for US supplies as farmers in Brazil struggle to get their crop in the ground.

"Delayed planting means delayed harvest, which delays the start of Brazil's export season," Arlan Suderman, chief commodities economist for broker StoneX, said in a note to clients.

"The first soybeans typically reach the port for shipment to China in January, but that could be delayed by a month, extending the US export season."

At 10:20 a.m. CDT (1520 GMT), Chicago Board of Trade November soybeans were up 25-1/4 cents at $10.46-3/4 a bushel.

On a continuous basis, the most-active soybean contract peaked at $10.49-3/4 a bushel, its highest level since May 24, 2018.

A lack of rain in the coming days should further delay Brazil's soybean planting, consulting firm AgRural said on Monday.

Private exporters reported the sale of 154,400 tonnes of soybeans to unknown destinations, the US Agriculture Department said on Tuesday morning.

CBOT July soft red winter wheat was up 12-3/4 cents at $5.97 a bushel.

The most-active contract topped out at $6.01-3/4 a bushel, its highest price since July 1, 2015.

Dryness in Argentina will add stress to the developing wheat crop from that key exporter, forecaster Commodity Weather Group said in a note.

Traders also cited technical buying and short covering in wheat.

CBOT December corn was up 7-1/2 cents at $3.87 a bushel, with the most active contract hitting its highest level since Jan. 24.