Grain and soybean futures turned higher on Friday, bolstered by a wave of speculative interest.
Mounting concerns about excessively dry weather in Argentina, a threat to the country's growing corn and soybean crops, sparking buying.
The Commodity Weather Group said that scattered rains over the weekend would reach up to half of the country's corn and oilseed, but that would mostly give way to dryness. Around a quarter to a third of Argentine crops were at most imminent risk of moisture stress.
For money managers holding bets that grain prices would fall, Friday's weather forecasts proved an opportune moment to unwind some of those positions at the Chicago Board of Trade.
"Soybeans, corn, wheat and soymeal have witnessed moderate fund buying with traders closely watching South American weather forecasts," AgResource Co. said in a note to clients. "The heavy fund short position in the grain along with the prospect of future heat/dryness is producing a firm CBOT."
Outside markets, and fund positioning at the start of the month, sparked further speculative buying. Crude-oil prices rose, bringing hedge funds and others into the commodity sector and encouraging them to buy agricultural contracts. The U.S. dollar fell, meanwhile, making American crop exports more competitive.
CBOT December corn futures rose 0.9% to $3.44 3/4 a bushel, while January soybean contracts climbed 0.9% to $9.94 1/4 a bushel. December wheat gained 1.3% to $4.14 1/2 a bushel.
In a report released after the market closed, the U.S. Department of Agriculture said that soybean processors crushed 176 million bushels of oilseed in October, up from 145 million in September and steady from a year earlier. That was supportive for soybean futures, said Terry Reilly of Futures International.
In a separate report, the Commodity Futures Trading Commission said that, as of Tuesday, money managers had increased their net long position in the soybean market by 57% to 31,662 futures and options contracts. Those investors trimmed their net short in the corn market by 7% to 196,763 contracts, while extending their net short in wheat.
Write to Benjamin Parkin at firstname.lastname@example.org
(END) Dow Jones Newswires
December 01, 2017 16:13 ET (21:13 GMT)