U.S. grain and soybean futures extended their recoveries from prior declines Tuesday, fueled by investors returning as buyers on easing global economic jitters.
The influence of external financial markets supported prices, with a weaker U.S. dollar and soaring global equity and energy markets attracting broad-based buying.
Investment funds were featured buyers across broader asset classes, fueled by renewed hopes the European Union will adequately address the euro-zone debt crisis, says Terry Reilly, analyst with Citi in Chicago.
Investment funds were estimated net buyers of 6,000 corn, 4,000 soybeans and 3,000 wheat contracts, all decent amounts.
The markets were also supported by fresh demand, with South Korea buying optional origin corn, wheat and soymeal in tenders announced Tuesday.
As the day unfolded, however, corn, wheat and soybeans pared their early gains, succumbing to light profit-taking pressure from traders trimming risk before the end of the month and quarter and ahead of Friday's crop inventory and production reports from the U.S. Department of Agriculture.
Traders remain nervous about the risk for more selling ahead of quarter-end, remaining cautious that USDA could estimate grain supplies were larger than expected at the start of September.
Seasonal harvest weakness trickled in to limit advances in corn and soybean prices, as traders are mindful that large amounts of corn and soybeans will be hauled in from Midwest fields in the next few weeks.
Midday weather forecasts projecting drier Midwest weather, ideal for accelerating harvest next week, limited buying interest as well.
Nevertheless, corn and soybean markets remain fundamentally supported by outlooks for tightening supplies, but traders await renewed confidence in global markets before aggressively taking on risk, Reilly adds.
U.S. wheat futures also drew support from increasing concerns about dryness hurting crops in key growing areas and expectations for increasing demand following last week's decline in prices.
Chicago Board of Trade November soybeans ended up 3 1/4 cents, or 0.3%, to $12.63 a bushel. CBOT December corn climbed 4 1/4 cents, or 0.7%, to $6.52 1/4.
CBOT December wheat jumped 10 cents to $6.58 1/4 a bushel and Kansas City Board of Trade December wheat rose 9 cents to $7.53, but Minneapolis Grain Exchange December wheat slipped 3/4 cent to $8.69 1/4 after Monday's surge.
CBOT December soyoil ended up 0.7% at 52.78 cents per pound, and December soymeal finished up 0.1% at $330.50 per short ton. CBOT November rice closed up 22 1/2 cents at $16.35 per hundredweight.
Oats for December delivery gained 4 1/2 cents, or 1.4%, to $3.34 1/2 a bushel. Ethanol for December delivery rose 2.7 cents, or 1.1%, to $2.484 per gallon.