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U.S. grains: Soybeans, corn climb on fund-driven buying

Traders await monthly USDA crop reports on Wednesday

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Chicago/Reuters – U.S. soybean futures rose on Tuesday as fresh capital flowed into grain and oilseed markets a day ahead of a monthly government crop report and ahead of the results of the U.S. presidential election, analysts said.

Corn futures jumped two per cent to a one-week high and wheat followed the firm trend.

At the Chicago Board of Trade, the January soybean contract settled up 12-3/4 cents at $10.11-1/4 a bushel after reaching $10.20-3/4, its highest since Oct. 28.

December corn ended up eight cents at $3.54-1/4 per bushel after reaching $3.56-1/2, its highest since Oct. 31, and December wheat rose 5-1/4 cents at $4.15-1/4 a bushel.

“I think it’s new money inflow,” said Rich Feltes, vice president for research with R.J. O’Brien.

“It started in Asia last night. There was a capital flow coming into the Dalian market and the palm market, and it’s continuing here in Chicago,” Feltes said.

Traders were also adjusting positions ahead of the U.S. Department of Agriculture’s monthly supply/demand reports on Wednesday.

Analysts expect the government to raise its estimate of the record-large U.S. soy harvest, but robust export demand has offset worries about the size of the crop.

“The market is making a strong statement that it is more concerned about ongoing risk of Chinese soybean demand than it is about the crop edging higher on tomorrow’s crop report,” Feltes said.

Traders shrugged off news that China’s soybean imports for October were the lowest monthly purchases since February. China, the world’s top soybean buyer, imported 5.21 million tonnes of the oilseed in October, down 5.79 per cent year-on-year, customs data showed.

Soy and corn futures drew support from potential weather threats to South American crops as the Southern Hemisphere growing season gets under way.

“That threat may or may not emerge, but money managers do not want to miss out if it does,” INTL FCStone chief commodities economist Arlan Suderman wrote in a daily note to clients.

Wheat followed the firm trend. Funds hold a net short position in CBOT wheat and corn futures, leaving those markets open to bouts of short-covering.

Egypt’s state grain buyer, the General Authority for Supply Commodities (GASC), bought 240,000 tonnes of Russian and Romanian wheat in a tender, bypassing one offer of U.S. wheat, Cairo-based traders said.

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