U.S. corn led a broad rally in grain futures Tuesday, managing to bounce after recent liquidation pressures subsided.
The advances were fueled by crop worries and broad-based commodity strength. An ebb in worries about Europe's debt helped the market rebound from steep recent losses, as did Monday's crop-progress report, which showed corn in worse condition than expected and called into question analyst talk of benign U.S. weather.
"Once the big waves of liquidation selling subsided, the market redirected its attention to flooded acres, tight supplies and crop uncertainties," said Johns Kleist, analyst with ebottrading.com.
"The threat of lost acreage due to floods along the Missouri River and the need for a large crop yields to replenish tight supplies from last year's harvest, reminds us of the supportive fundamentals of the market," Kleist said.
Cargill Inc. Chief Executive Greg Page estimates some 2.5 million acres of corn have been lost as a result of heavy rains and flooding in the U.S., which have meant farmers planted significantly less than intended, the Financial Times reported on its website Monday. Both corn and wheat had sold off sharply in recent weeks, due to an exodus of investors and improving crop weather.
Further support was generated by U.S. Department of Agriculture reporting Monday afternoon that the portion of the crop rated good or excellent slipped to 68%, down from 70% the prior week. Traders were expecting the rating to hold steady or increase as much as two percentage points.
The decline was seen as a sign that crops in some areas are being hurt by excessive rains. Conditions fell in Illinois, Iowa and Minnesota, all key corn-producing states.
Traders are looking ahead to Thursday reports from the USDA and planted acreage and corn stockpiles as of June 1. The reports, along with weather forecasts, will likely guide the market's direction throughout the summer, traders said.
CBOT December corn ended up 4.2% at $6.83/bushel.
U.S. wheat futures rallied amid broad-based strength in corn and other commodities. Optimism about the economy helped lift equities and commodities, and weighed on U.S. dollar. Worries about the hard red spring crop, particularly in North Dakota, led the way, as MGEX September wheat surged 30 1/4 cents or 3.8%, to $8.33. Traders await Thursday's USDA acreage and quarterly stocks report. CBOT September wheat climbed 21 cents to $6.71 3/4 per bushel; September KCBT wheat gained 16 cents, or 2.1%, to $7.63.
Soybean futures ended higher, as market finds value near recent lows. Futures benefit from sentiment that prices have fallen enough for this time of year, with the uncertainties of a long growing season still ahead, said Kleist. CBOT Nov soy ended up 4 cents at $13.19/bushel.
CBOT December soymeal settled down 0.2% at $338.70/short ton, December soyoil finished up 0.7% at 56.59 cents/pound.
U.S. rice futures rallied Tuesday, managing to stabilize after slumping to more-than-three-month lows. The market bounced in unison with grain futures, as traders evened positions ahead of Thursday's USDA reports, analysts said. CBOT September rice rose 0.5% to $14.39 1/2/hundredweight.
Oat futures climbed, recovering from prior declines, as the market succumbed to broader-based buying in grain futures. The September contract advanced 2.5%, to $3.44 1/2 a bushel. Ethanol futures bounced Tuesday, driven higher by strong gains in corn and crude oil futures. Ethanol for December delivery rose 1.9% to $2.360 per gallon.
--Ian Berry contributed to this article.