Soybean futures bounced to a four-and-a-half month high as the risk of a La Niña weather pattern continued to foster buying.
In particular, traders were looking to signs of dryness in Argentina and some of southern Brazil as an indication of a La Niña pattern, which typically reduces crop yield in South America and can cause dryness in the Great Plains wheat growing region.
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"It's hard to be short or bearish amid drying Argentine/S Brazilian weather," said AgResource Co. in a note to clients "Until there is a clear change in the South American weather pattern, we see no reason to fight" rising soybean and corn prices.
Soybean futures led gains, with January contracts rising 1% to $10.08 1/2 a bushel at the Chicago Board of Trade. Analysts said that corn futures followed oilseed prices higher, with December contracts rising 0.1% to $3.39 3/4 a bushel.
Updated weather forecasts showed a slightly higher chance of showers in Argentina in 11 to 15 days. But a large portion of crops in the country were otherwise expected to remain dry through mid-December, alongside higher temperatures. That would soon begin to start hurting yield, analysts said.
Dryness in Argentina sparked by La Niña in previous years has resulted in cuts of 5.3% to 18.2% in soybean yield, according to Richard Feltes of R.J. O'Brien.
Market observers said that private forecasters Informa Economics trimmed its Brazilian soybean production estimate for this year to 110 million metric tons from its previous estimate of 111 million. The forecaster cut Brazilian corn production to 89 million tons, down 3 million from its prior figure.
Recent weather in most of Brazil's crop-growing regions has been largely excellent, analysts said.
CBOT December wheat futures fell 1% to $4.06 a bushel.
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(END) Dow Jones Newswires
December 05, 2017 15:49 ET (20:49 GMT)