Dry Argentine Weather Supports Grain and Soybean Prices

By FeaturesDow Jones Newswires

Soybean and wheat futures started the week higher, while corn contracts inched lower.

Mounting concerns about dry growing conditions in Argentina and data showing that hedge funds were betting heavily on lower grain and soybean prices prompted some buying on Monday.

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The Commodity Futures Trading Commission said late Friday that funds last week extended their net short positions in corn, soybeans and wheat. That brought them to the largest overall short position on record for grain and oilseed markets, according to analysts.

"Funds continue to sit in a stubbornly negative position on the grains," said Don Roose, president of U.S. Commodities. "It tells you that there's probably concern ... but it's not enough to put a major dent in changing the psychology of the markets."

A turn for the worse in Argentine weather forecasts encouraged traders to bet in the other direction on Monday, however.

The Commodity Weather Group said much of Argentina's corn and soybean belt, which has struggled with dry conditions throughout this growing season, would go without rain over the next 15 days. The proportion of crops stressed by the lack of moisture would grow to a quarter, it said.

Analysts said the dry weather could take an increasing toll on yields as those crops approach maturity.

Soybean meal prices in particular led gains, helping the broader soybean market higher. Argentina is the world's largest soybean meal exporter. Corn prices initially rose but turned lower after physical grain traders started to sell their product.

Soybean futures for March delivery rose 0.7% to $9.84 1/4 a bushel at the Chicago Board of Trade. March corn futures fell 0.1% to $3.52 a bushel while March wheat gained 0.7% to $4.25 3/4 a bushel.

A lower U.S. dollar helped make American crops cheaper for international buyers. That further bolstered grain and oilseed markets.

Write to Benjamin Parkin at benjamin.parkin@wsj.com

(END) Dow Jones Newswires

January 22, 2018 15:50 ET (20:50 GMT)

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