December 29, 2011

CBOT corn, soy rise on bad weather concerns in Brazil, Argentina

CBOT corn and soy rallied on Tuesday (Dec 27) because of rising expectations that the adverse weather in Argentina and Brazil will be boosting demand for US supplies.

The most active corn contract for March delivery added 13.75 cents, or 2.2%, to close at US$6.33 per bushel. March wheat jumped 22.75 cents, or 3.7%, to US$6.45. January soy jumped 37 cents, or 3.2% to close at US$12.1 per bushel.

Corn and soy extended its winning streak on Tuesday (Dec 27), amid increasing concerns over threatening weather condition in South America, after rain came up short of expectation over the weekend.

A trader said that hot, dry conditions in next ten days will increase stress on plants in parts of South America, which may cause downward revisions in the Brazilian crop, after below-normal rain in the past month reduced soil moisture.

The market also got a boost from upbeat outside market forces, as US dollar weakened and US equity jumped, after a report showed confidence among US consumers rose to an eight-month high in December, lifting market sentiment.