Corn up nearly 2pc on short-covering; soy, wheat climb

CHICAGO: U.S. corn futures rose about 2 percent on Friday on fund-driven short-covering and talk of increased export demand, while soybeans hit a one-week high as worries about stressful crop weather in Argentina lifted soymeal futures, analysts said.

Wheat followed the firm trend, which extended broadly across the commodities sector. The 19-market Thomson Reuters Core  Commodity Index was up more than 1 percent.

Chicago Board of Trade December corn settled up 6-1/2 cents at $3.43 per bushel. January soybeans ended up 18-1/2 cents at $9.90-1/2 a bushel while December soymeal rose $7.70 to $318.20 per short ton, after reaching $318.90, its highest since Nov. 9.

CBOT December wheat rose 5-3/4 cents at $4.27-1/4 a bushel.

Corn climbed ahead of the weekly Commitments of Traders (COT) report from the U.S. Commodity Futures Trading Commission, which traders expected to show large speculators holding a near record-large short position.

"Concerns about a build-up in shorts in today's COT report for corn and wheat ... prompted today's CBOT short-covering rally," said Jerry Gidel, analyst with the Price Futures Group.

Additional support stemmed from talk of a firming cash basis at U.S. Pacific Northwest export terminals, which sparked chatter about possible corn export sales to China.

"You've got record corn shorts, and you've got a trigger here with some business that you weren't anticipating," said Roy Huckabay with Linn & Associates.

Soybeans advanced on worries about crop weather in Argentina, the world's top exporter of soymeal, especially given forecasts for the La Nina weather phenomenon to develop in the coming months, during the South American growing season.

La Nina is associated with below-average rains in the Argentina's crop areas.

"People are nervous that we are going to come in here with a hot and dry Argentina forecast," said Terry Roggensack, analyst with the Hightower Report.

Wheat futures firmed along with corn and soy, drawing additional support from a softer dollar, which tends to make U.S. grains more attractive on the global market.