US soy, corn futures rise on short-covering

US soy and corn futures nudged higher on Tuesday (June 23) on short-covering, but gains were curbed by favourable weather conditions and a firm dollar.

Wall's Street sell-off on Monday (June 22), its worst one-day loss in two months, drove up the safe-haven US dollar, denting the upside for greenback-priced commodities such as grains which became more expensive for overseas buyers.

Chicago Board of Trade (CBOT) soy for July delivery rose 0.65 percent to US$11.59 per bushel while July corn gained 0.39 percent to US$3.86-A¾ per bushel. Wheat for July delivery fell 0.73 percent to US$5.42 per bushel.

Wheat futures are languishing at six-week lows as harvesting of the new US winter wheat crop accelerates amid improving weather conditions.

After a wet weekend across the US southern Plains, the next week to 10 days should be mostly clear, giving wheat farmers a big window to run combines across Kansas, the top US wheat state.

Corn prices have sunk to two-month lows as crops in the US Midwest look set to be boosted for warm weather this week, which will follow heavy weekend rains and create a perfect climate to boost young corn and soy seedlings.

Soy futures recovered from a one-month trough struck on Monday (June 22), when an improved weather outlook for young crops countered tight supplies of old crop beans.

Analyst Doug Whitehead said soy have probably over-extended to the downside as they still have some reasonably favourable fundamentals, particularly in the front-month contract as old crop stocks are still pretty tight.

The price spread between old-crop July soy and new-crop November soy remains relatively wide, at around US$1.70 with July at a premium, reflecting tight domestic supplies of old crop beans.