U.S. soybeans and corn extend rally on South America weather

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CHICAGO — Chicago soybeans and corn extended gains on Monday to hit multi-month highs as unfavorable heat and dryness in South America stoked supply worries.

Wheat also rose early in the session, bolstered by hopes for greater export demand, then slipped by mid-day on technical trading. Dealers said many market participants were still on vacation after the Christmas break, so relatively small trades were causing larger-than-usual price moves.

Chicago Board of Trade’s most-active soybeans rose 1.96% to $13.67 a bushel by 1612 GMT, extending gains seen before Christmas and, in mid-day trading, hitting their highest since Aug. 17.

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Corn rose 1.03% to $6.12 a bushel, hitting its highest since late June. Wheat was down 0.31% to $8.12-1/4 a bushel.

Soybean and corn crop harvests are expected to be smaller in southern Brazil this season as fields are suffering from dryness, weather forecasters and consultancies said.

“The weather pattern over South America is static and that system is now showing that there could be problems going into Argentina,” said Don Roose, president of Iowa-based U.S. Commodities. “The question now is whether a La Nina weather pattern will continue to stress the crops.”

Meanwhile, China will stabilize its corn production and expand its soybean output in 2022, the Communist Party’s People’s Daily quoted the agriculture minister as saying on Monday.

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Wheat was supported by expectations of more demand, with a long-awaited tender from Iraq issued just before Christmas and new tenders seen possible from other buyers.

There are expectations that Egypt may issue a new wheat purchase tender, too, as China’s import needs continue to firm and Russia’s export taxes have increased again, traders said.

Russia has raised its wheat export taxes for the Dec. 29-Jan. 11 period, the agriculture ministry said on Friday. Russia, the world’s largest wheat exporter, launched grain exports taxes in June as part of measures to cool domestic food inflation. (Additional aeporting by Michael Hogan in Hamburg and Emily Chow in Beijing; Editing by Pravin Char and Alison Williams)