Chicago wheat futures rose for a fourth straight session on Monday amid expectations a likely export ban in Ukraine would shift overseas buyers to the United States and on concerns about dry weather in the southern Plains bread basket.
Soybeans rallied to recoup Friday's losses as the largest harvest in the world began to wind down in the United States. Farmers were storing much of their crop, helping to strengthen prices at some Midwest cash markets.
Cash grain merchandisers said basis bids for soybeans in Indiana jumped 14 cents per bushel, while in Iowa they climbed 5 cents. The market was also supported by strong export demand, led by China, despite concerns over a slowdown in its growth.
Farmers had harvested 87 per cent of their corn crop, the U.S. Department of Agriculture's weekly crop progress report on Monday showed. Analysts polled by Reuters had expected 89 per cent. The soybean harvest was 80 per cent complete, just below expectations for 82 per cent.
The corn harvest in the top two producing states of Iowa and Illinois was 93 per cent and 92 per cent complete, respectively. Farmers in Iowa had harvested 96 per cent of the soybean crop, while in Illinois 80 per cent was harvested.
"Basis values are improving and the market typically finds the lows when we get past 50 per cent of the harvest," said Brian Hoops, president of Midwest Market Solutions.
He was expecting funds to buy corn futures at the Chicago Board of Trade when the December contract breaks the 50-day moving average at $7.73-3/4 a bushel - just about 10 cents above where the contract was trading on Monday morning.
"We are just a dime away from funds coming into the corn market," he added.
Prices for CBOT March soybeans and beyond gained less than the front months because of expectations for a record-large soybean crop in Brazil, the world's No 2 exporter, which typically begins hitting export markets in March.
Brazilian analyst Safras e Mercado raised its estimate of the country's soybean production to a record 82.5 million tonnes from its July estimate of 82.3 million due to farmers expanding the area to be planted with the oilseed.
CBOT December wheat gained 0.7 per cent to close at $8.78-1/4 a bushel. November soy climbed 0.8 per cent to $15.46-1/2 a bushel and December corn gave up the day's gain to slip 0.03 per cent to $7.61-1/4 a bushel.
CBOT November soybeans have slumped 14 per cent, or about $2.49, from the all-time high of $17.94-3/4 per bushel set on Sept 4 as timely rains in August boosted yields. That prompted fund managers to cut their bullish bets in the market.
The wheat market has been rallying since last week on speculation by traders that Ukraine, the world's ninth-largest exporter, would ban exports from Nov. 15 because dry weather reduced production by about one-third this year.
There was also support from concerns that dry weather in the Southern Plains wheat belt may hurt crop prospects.
"There's not a whole lot of rain for the next week to 10 days," said John Dee, a meteorologist for Global Weather Monitoring.
Ukraine's agriculture ministry said on Friday that the current strong pace of wheat exports would exhaust the country's stocks available for shipping abroad by Nov. 15-20.
It said traders had signed agreements to export 3.57 million tonnes of wheat as of Oct. 18.
The USDA has forecast Ukraine wheat exports this year at 4 million tonnes on a crop of 15.5 million tonnes.
Traders said Ukraine's likely ban on wheat exports would also be supportive for corn as a sizable portion of Ukrainian wheat is used as a corn substitute in feed.
"It is bullish although not a runaway bullish story like two years ago," Brandon Kliethermes, a senior economist at Global Insight-IHS said, referring to an export ban by Russia then that led to a significant rally in wheat futures.
"We knew something was coming, that there would be some sort of export limitations," he said, adding that any ban by Ukraine could help U.S. corn exports. "U.S. corn is still overpriced but this (Ukraine ban) could turn the tide."
Russia's agriculture minister, Nikolai Fyodorov, has said he would oppose any ban on grain exports, quashing speculation the country could follow Ukraine, RIA Novosti reported.