U.S. soybean futures staged their strongest rally in five weeks on Thursday and wheat posted the steepest gain in a week, spurred by technical and bargain buying as the U.S. government returned to work and the dollar fell.
Corn prices were flat, supported by good export demand but anchored by the advancing harvest of a likely record-large U.S. crop.
"While the government was closed, China was a pretty big buyer and people are anticipating that they'll be seeing some big export sales numbers coming out," said Don Roose, president of U.S. Commodities.
"We're also at some levels that we're getting some technical buying."
Traders were digesting news from the U.S. Department of Agriculture on Thursday following the back-to-work order from U.S. government officials.
USDA said it was cancelling a delayed release of the October crop production report that had originally been scheduled for Oct. 11 because there has not been enough time to gather necessary data. The next USDA crop report is scheduled to be released Nov. 8.
However, investors were awaiting the release of nearly three weeks of other delayed USDA data, including export sales data likely to show nearly three million tonnes of soybeans and more than two million tonnes of corn were sold to overseas buyers.
Chinese agricultural consultancy Shanghai JC Intelligence said China has bought nearly 1.2 million tonnes of corn this month.
Chicago Board of Trade November soybeans rose 16-3/4 cents, or 1.3 per cent, to $12.93-1/4 a bushel, supported by technical buying above its 100-day moving average of $12.87-3/4 (all figures US$).
CBOT December wheat added 4-1/2 cents, or 0.7 per cent, to $6.86 a bushel while December corn was 1/4 cent higher at $4.43 a bushel.
Commodity funds bought an estimated net 8,000 soybean contracts and 3,000 wheat contracts on the day but were net even in corn, trade sources said. The funds also bought an unusually heavy net 5,000 soymeal contracts as futures rallied more than two per cent.
The U.S. dollar index fell nearly a full percentage point on Thursday, making dollar-denominated commodities more attractive to buyers holding other currencies.
"The dollar being down this much created a tailwind for everything including grains, but grains still aren't fully reflecting the extent of the dollar's decline," said Sterling Smith, futures specialist for Citigroup.
Some delays this week in harvesting the U.S. corn and soybean crops also lent a modest amount of short-term support to corn and soybeans. Still, gains were tempered by expectations for a record-large U.S. corn crop and the fourth-largest soybean crop ever.
Light showers from now into the weekend in portions of the Midwest will cause only minor delays in harvesting the 2013 U.S. corn and soybean crops, an agricultural meteorologist said Thursday.
"There will be a few light showers today in the southern Midwest and by Saturday they will move to the eastern Midwest. Amounts will be very light from 0.1 to 0.25 inch or less so there will be only some brief delays from the showers," said Don Keeney, meteorologist for MDA Weather Services.
Wheat may have garnered support from a threatened rail strike in Canada that could hamper Canadian wheat exports and shift some business to the U.S., traders said.
"The outstanding wheat crop in Canada is likely to help compensate for losses in other countries such as China, the Black Sea region and Brazil," Commerzbank said in a market note.
"In the short term, however, the increased supply from Canada may not be available due to the threat of a strike by Canadian rail workers."
-- Sam Nelson and Karl Plume report for Reuters from Chicago. Additional reporting for Reuters by Nigel Hunt in London and Naveen Thukral in Singapore.
Possible rail strike may further slow huge Prairie crop movement, Oct. 16, 2013