US wheat futures rose more than 3 percent early on Monday as recent floods in parts of Texas and forecasts for continued dry weather in the US Plains buoyed the market that has been falling in recent weeks. Futures prices for corn crept higher as US farmers continued to cling to their stockpile of corn.
Chicago Board of Trade December wheat had gained 3.8 percent to $5.09-1/4 a bushel by 10:14 a.m. CDT (1514 GMT), while corn was up 1 percent at $3.83-1/2 a bushel. November soyabeans dropped 0.6 percent to $8.90 a bushel as part of a broader fall on the vegetable oil complex, with palm oil falling more than 2 percent in Malaysia earlier in the day.
Wheat futures are being underpinned by lack of rain in the US Plains, which could threaten the winter crop yields. Dry weather in Russia, another key exporter, is also supporting prices. The torrential rains from Hurricane Patricia's wake led to flooding across a swath of southern and south-east Texas, but the rains missed dry wheat production areas in Oklahoma and top-producer Kansas.
Wheat traders were also monitoring renewed dry weather forecasts in Ukraine. The country received some rainfall last week but traders were concerned it may not be sufficient to compensate for a severe drought that the agriculture minister had said could cause Ukraine's winter wheat acreage to shrink by more than 10 percent.
In corn, large speculators switched to a net short position in corn futures in the week to Oct. 20, 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 to a near-record in CBOT wheat and their net short position in soyabeans.