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Grains start December with a bang

Corn and soybeans kicked off December on a higher note, with each pit driven by different factors, according to Dow Jones Newswires reports.

Corn rallies on wheat, Argentina dryness

CHICAGO (Dow Jones)--U.S. corn futures surged Wednesday on rallying wheat prices, a weaker dollar and worries about Argentina's crop.

December corn ended up 3.8%, or 21 3/4 cents, to $5.51 3/4 per bushel.

A 7% rally in wheat, due in part to concerns about crops in Australia and the U.S., fueled Wednesday's gains. A soggy harvest season in Australia has hurt the quality of the wheat there, and dry weather in the U.S. Plains has prompted concern about the winter wheat crop.

Wheat and corn are tied together because both are used as feed. Soybeans, which is tied to corn because the two compete for available acreage, also surged Wednesday as a weaker dollar lifted commodities generally.

Also supporting corn was a dry Argentina forecast. T-storm Weather meteorologist Mike Tannura said that while areas around Buenos Aires were getting thunderstorms Wednesday, the benefit to crops would be isolated.

"The end result is that major dryness deficits remain stable... through at least December 8 in Argentina," he said in a forecast. Rainfall deficits in some areas are 4 to 6 inches since Oct. 15, he said.

Analysts say that given a disappointing U.S. corn crop in 2010 and tightening supplies expected in 2011, the world cannot afford a poor crop from Argentina, the world's second largest producer.

Technically, the market pushed above key moving averages, including the 50-day, which could inspire more buying Thursday, analysts said.

While many analysts say the market still has upside due to tight supply projections, others note that export demand has sagged at prices above $5.50.

CBOT oats rallied Wednesday along with other grains. Oats for March delivery, the most active contract, was up 13 cents, or 3.7%, to $3.63 per bushel. Front-month December oats soared 8%, ending up $3.67 1/4.

Ethanol futures were higher. December ethanol closed up $0.018, or 0.9%, to $2.124 per gallon.

-By Ian Berry, Dow Jones Newswires; 312-341-5778;
(END) Dow Jones Newswires
December 01, 2010 15:58 ET (20:58 GMT)
Copyright (c) 2010 Dow Jones Company, Inc.

Soybeans jump on weak dollar, demand expectations

CHICAGO (Dow Jones)--U.S. soybean futures climbed Wednesday as losses in the dollar and expectations for strong export demand boosted prices.

Soybeans for January delivery, the most-active contract, surged 40 cents, or 3.2%, to $12.83 a bushel at the Chicago Board of Trade. Futures can rise by a maximum of 70 cents a day.

Underpinning the market was weakness in the greenback, which boosted prices for dollar-denominated commodities ranging from crude oil to grains. Strength in crude oil added support to soybeans because biodiesel is made from soybean oil, traders said.

"The name of the game today was just buy everything," said Dale Durchholz, analyst for AgriVisor, an agricultural advisory firm in Illinois.

Investors cheered improving data on China's manufacturing sector, which was seen as an encouraging sign of future demand, analysts said. China is the world's top soybean importer and has been buying U.S. soybeans at a record fast pace.

"China's economy remains strong enough to maintain their substantial" buying of commodities, said Brian Hoops, president of Midwest Market Solutions, a South Dakota-based brokerage firm.

Soybean futures reached 26-month highs last month on worries strong demand from China was draining supplies. Prices have since pulled back about 4%.

Traders remain on edge about the outlook for global supplies because key growing areas in South America need rain. Mainly dry and increasingly warm to hot weather is expected to envelop Argentina late in the weekend and early next week, said Mike Tannura, agricultural meteorologist for T-Storm Weather.

"A low chance for rain continues later next week, but we are not forecasting significant totals," he said.

Argentina is the world's third-largest soybean exporter, after Brazil and the U.S. Strong demand from China has increased the importance for large global crops, analysts said.

"The market is sensitive to the beginning of smaller weather issues," said Mike Krueger, president of The Money Farm, a grain marketing advisory service in North Dakota. "If we really do start to take bushels or tons out of Brazil or Argentina, (prices) are going higher."

Soy Products

U.S. soy product futures finished firmer on weather worries and broad-based commodity buying, traders said. Soyoil led the upside on carryover support from a rally in Malaysian crude palm oil futures, which climbed on expectations for heavy rains to disrupt the harvest in major palm oil growing regions, they said.

CBOT January soymeal closed up $7.80, or 2.3%, at $348.50 per short ton. CBOT January soyoil soared 1.61 cents, or 3.2%, to 52.61 cents per pound.

-By Tom Polansek, Dow Jones Newswires; 312-341-5780;
(END) Dow Jones Newswires
December 01, 2010 15:57 ET (20:57 GMT)
Copyright (c) 2010 Dow Jones Company, Inc.

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