Chicago Board of Trade soybean futures rose for the first time in four sessions on Wednesday on bargain buying a day after the benchmark November contract fell to a three-week low, and as worries about tight U.S. supplies lingered.
Corn and wheat also firmed, rallying near the closing bell on a drop in the value of the U.S. dollar after the U.S. Federal Reserve surprised investors by deciding to continue its massive stimulus program. The move buoyed Wall Street and lifted gold and crude oil values as well.
"It gave us a little boost. The whole commodity patch traded higher and there was so little going on in grains, they got caught up in the tailwind," said Rich Feltes, vice-president for research with R.J. O'Brien.
The grain trade was subdued as brokers awaited more yield and quality data from the start of the U.S. corn and soy harvest.
At the CBOT, November soybeans settled up 5-1/4 cents at $13.47-3/4 per bushel. December corn ended up 2-1/4 cents at $4.56-1/4 a bushel and December wheat was up 3-1/2 cents at $6.46-1/2 a bushel.
"Today there is a void of fresh news. We are seeing a bit of consolidation, and that's the name of the game in very thin volume," said Karl Setzer, analyst with the MaxYield Cooperative in West Bend, Iowa.
Gains in soybeans were led by deferred contracts on concerns that a late-summer dry spell in the Midwest could hurt 2013 yield prospects, keeping supplies tight throughout the 2013-14 marketing year that began Sept. 1.
The U.S. Department of Agriculture last week slashed its forecast of 2013-14 U.S. soybean ending stocks to 150 million bushels, from 220 million in August.
"The soy complex, from here through the remainder of the marketing year, is going to be hypersensitive to anything that can impact stocks. That is why funds are sitting on a huge long position in soybeans," Setzer said.
However, gains were limited because rains have been falling in parts of the Midwest this week. The showers arrived too late to help most crops but could bolster late-planted soybeans in a few areas.
"Some of the dry area is going to receive at least some rain, and maybe there are some green beans left out there that can still benefit," said Dan Cekander, analyst with Newedge USA in Chicago.
Confirmation of a large U.S. soybean sale to China offered minimal support to the market. USDA on Tuesday said private exporters reported sales of 2.112 million tons of U.S. soybeans, with most earmarked for China for delivery in 2013-14. The remainder was sold to unknown destinations.
The announcements followed purchase agreements signed Monday by several Chinese companies during a trade delegation visit to Davenport, Iowa. The agreements are not binding contracts, but some exporters declare them to USDA, which then reports the deals as confirmed sales per daily reporting rules.
Similar signing ceremonies in 2011 and 2012 triggered confirmations by USDA of the two largest single-day U.S. soybean sales on record.
"It's more of a goodwill gesture. That isn't much of a deal for the market," Setzer said.
Corn halts four-session skid
Corn ended higher for the first time in five trading sessions. The corn market has been under pressure since USDA last week issued a larger-than-expected forecast of this year's crop. But a slow start to the harvest, along with separate USDA data suggesting a smaller planted area than previously estimated, underpinned values.
Cash basis bids for corn firmed at processors and elevators in parts of the Midwest this week after rains stalled early harvest activity and slowed farmer deliveries, grain merchants said.
In a weekly crop update on Monday, USDA said the corn harvest was four per cent complete as of Sunday, lagging behind the five-year average of 10 per cent for this time of year.
Wheat futures firmed on short-covering in thin volume. Funds hold a large net short position in CBOT wheat, leaving the market open to short-covering.
-- Julie Ingwersen is a Reuters correspondent covering ag commodity markets in Chicago. Additional reporting for Reuters by Gus Trompiz in Paris and Colin Packham in Sydney.