Chicago Rally Continues

20/12/11 -- Soybeans: Jan 12 Soybeans closed at USD11.44 1/2, up 7 1/2 cents; Mar 12 Soybeans closed at USD11.54 1/2, up 7 3/4 cents; Jan 12 Soybean Meal closed at USD295.20, up USD2.20; Jan 12 Soybean Oil closed at 49.38, up 33 points. Beans were higher for the fourth straight session in a row on widespread concerns over dryness and heat in southern Brazil and Argentina. Funds bought an estimated 5,000 soybean contracts on the day as beans rose to their highest in four weeks. Some forecasts are citing rain for Argentina later in the week, although there are conflicting reports over the amount involved.

Corn: Mar 12 Corn closed at USD6.07, up 6 cents; May 12 Corn closed at USD6.15 3/4, also up 6 cents. This was the highest close for corn in more than a month. Funds bought around 7,000 corn contracts on the day on the back of the South American problems which could be worse for corn than they are for soybeans. "Moisture stress is building in Brazil corn and soybeans due to sub-par rainfall since November 1. Dry conditions would not be damaging in Brazil crops if generous rainfall developed the remainder of the summer season. Yet with a moderately strong La Nina in effect, there may be a reason to worry about drought," say Martell Crop Projections.

Wheat: Mar 12 CBOT Wheat closed at USD6.07 3/4, up 8 cents; Mar 12 KCBT Wheat closed at USD6.68, up 9 1/2 cents; Mar 12 MGEX Wheat closed at USD8.39 1/4, up 12 cents. Wheat got dragged higher for the third day in a row on the back of the South American story. Crop conditions in the US southern Plains are improving for winter wheat. Russian grain exports are expected to be around 17.5 MMT by the end of the year, with wheat accounting for around 12.2 MMT of that. The Ministry there now say that they'd be comfortable with total grain exports of 25 MMT for 2011/12, which potentially takes them through to the end of March at the rate of around 2.5 MMT/month. Kazakhstan have more than enough wheat to take up the slack after that.