Chicago grains, soybeans rally strongly on weather worries

Wheat, corn and soybean futures at Chicago Board of Trade (CBOT) all closed higher Wednesday as investors worried that bad weather would damage some crops, despite strength in the U.S. dollar and ample global crop supplies.

Chicago corn led the gains as the most active corn contract for May delivery gained 10.75 cents, or 2.96 percent, to close at 3.735 U.S. dollars per bushel.

May wheat delivery added 9 cents, or 1.99 percent, to close at 4.615 U.S. dollars per bushel. Soybean for May delivery rose 19.5 cents, or 2.08 percent, to close at 9.5575 dollars per bushel.

U.S. corn jumped above the highest level in nearly four months, as the market kept debating yield losses in Brazil due to ongoing dry conditions, and a sign showed U.S. corn exports were accelerating in recent days.

The U.S. Department of Agriculture said on Wednesday private exporters had booked export sales of more than 110,000 metric tons of corn for delivery during the 2015-16 crop year.

U.S. Energy Information Administration, however, reported in the same day a big drop in ethanol production and a slight rise in inventory, which were seen as bearish to corn futures.

U.S. ethanol production through the week ending April 8 was down 3.9 percent from the prior week to 938,000 barrels per day, while U.S. ethanol stocks increased by 0.46 percent through the week.

May soybean extended gains for the fourth straight session Wednesday, with prices logging a new eight-month high, buoyed by news that heavy rain and flooding had slowed the pace of Argentine soybean harvest with denting output of some crops.

Argentina is a major U.S. rival for soybean production and export. Some analysts said damage assessments range from 1.2 million to 3 million metric tons of soybeans.

Meanwhile, wheat prices rose sharply Wednesday following the rallies in corn and soybean market, despite coming rainfall across the U.S. western Plains, where part of U.S. winter wheat belt has suffered from dryness over the past weeks.

A higher U.S. dollar failed to cap the big gains in CBOT grains and soybeans for the day. The U.S. Dollar Index, a measure of the dollar against six major currencies, rose by more than 0.7 percent during the session.

Generally, a stronger U.S. dollar can be a negative for agricultural commodities, priced in the U.S. dollar, as it makes them more expensive for investors holding other currencies, while a weaker U.S. dollar can support the dollar-denominated commodities. Endit