Chicago grains, soybeans sharply higher amid rising weather concerns

Chicago Board of Trade (CBOT) wheat, corn and soybean futures closed all sharply higher Tuesday, as investors expected Argentine soybean production would be cut severely due to wet harvest weather.

Chicago soybeans led the gains as the most active soybean contract for July delivery rallied 31.75 cents, or 3.3 percent, to 9.9475 U.S. dollars per bushel.

Wheat for July delivery added 13.25 cents, or 2.75 percent, to 4.9425 dollars per bushel. July corn delivery gained 4.5 cents, or 1.17 percent, to 3.895 dollars per bushel.

July soybean jumped to the highest settlement since July 22, 2015, as rainfall continued to stall harvest activity in Argentina, a major U.S. rival for production and export of soybeans.

Some commercial sources argue that Argentina's soybean crop ranges from 57-60 million tons, down 2-4 million tons from their prior forecast, and some even expected that the production would be down as much as 10 million tons.

The midday weather forecast showed additional heavy rain will fall across the northeastern corner of Argentina, Uruguay and the southern Brazil.

Dry weather will continue four to five days into the weekend with a new cold front passing through on Sunday/Monday that would produce rain, according to the Global Forecast System.

U.S. wheat futures rose sharply for a second straight session on Tuesday as traders kept cutting their net short positions after the U.S. Commodity Futures Trading Commission data showed speculators held a huge net short position.

Chicago grains and soybeans also got support from a lower U.S. dollar for the day.

The U.S. Dollar Index, a measure of the dollar against six major currencies, lost more than 0.4 percent during the session, lifting dollar-denominated commodities. Endit