Grain futures higher; soy, corn gain on South America crop delays

Investing.com - U.S. grain futures were higher during European morning hours on Wednesday, with soybean and corn prices advancing as traders continued to monitor rains forecast for later this week in Brazil and Argentina.

U.S. markets were set to reopen Wednesday, after remaining closed the previous two days, as Hurricane Sandy caused major damage in the U.S. northeast.

On the Chicago Mercantile Exchange, soybeans futures for January delivery traded at USD15.4688 bushel, gaining 0.65%. The January contract rose by as much as 0.85% earlier in the day to trade at a session high of USD15.4888 a bushel.

In Brazil, heavy rains were forecast in key grain-growing regions across the country for later this week or next weekend, potentially delaying early-season planting of soy crops.

Industry group Safras e Mercado said in a report earlier in the week that soybean planting in the country was 28% completed as of October 26, down from 41% recorded during the same week a year earlier.

Furthermore, influential industry group Oil World cautioned that rain delays could reduce soy plantings in Brazil and Argentina, the world’s second and third largest exporters of the oilseed.

Soybean prices have been under pressure in recent weeks, losing nearly 15% since hitting an all-time high of USD17.8888 a bushel on September 4, as U.S. farmers started harvesting soybeans at a brisk pace.

Meanwhile, corn futures for December delivery traded at USD7.4688 a bushel, gaining 0.7%. Front-month prices rose to a session high of USD7.4788 a bushel earlier in the day, the strongest level since October 25.

Corn prices have been under pressure in recent weeks, as a combination of easing concerns over the pace of the U.S. harvest and worries over slowing demand for U.S. corn dampened the appeal of the commodity.

Corn futures are down nearly 12% since touching a record high of USD8.4237 a bushel on August 10.

Futures dropped to the cheapest level since October 15 earlier in the week, before turning higher as investors returned to the market to seek cheap valuations.

Elsewhere, wheat for December delivery traded at USD8.6688 a bushel, climbing 1.2%. The December contract rose by as much as 1.4% earlier in the session to hit a daily high of USD8.6875 a bushel.

Wheat prices continued to draw support from concerns over a disruption to global supplies.

Front-month wheat prices rallied to a three-week high of USD8.9475 a bushel on October 24, after Ukraine's agriculture minister said the country would ban wheat exports from November 15.

Ukraine is one of the world’s largest wheat exporters and competes with the U.S. for business on the global market. A disruption to supplies from the country could boost demand for U.S. supplies, which is the world’s third largest wheat producer and biggest exporter.
 
Corn is the biggest U.S. crop, followed by soybeans, government figures show. Wheat was fourth, behind hay.