U.S. soybeans climbed to their highest level in nearly a month on Wednesday on a mix of technical strength and robust demand from exporters as well as domestic processors, traders said.
Corn followed soybeans higher and drew further support from bullish weekly U.S. ethanol data, and wheat snapped out of a four-session slide.
At the Chicago Board of Trade, soybeans for January delivery settled up 23-3/4 cents, or 1.6 per cent, at $14.79-1/4 per bushel after reaching $14.79-3/4, the contract's highest level since Nov. 9 (all figures US$).
CBOT March corn ended up 5-3/4 cents, 0.8 per cent, at $7.57-3/4 a bushel, and March wheat rose 3-1/2 cents, 0.4 per cent, to end at $8.60 a bushel.
CBOT January soybeans made a solid break above their 200-day moving average at $14.64 and settled above that line for the first time in nearly a month.
Wednesday's soy market strength followed a late-session rally on Tuesday as rumours swirled of renewed Chinese demand for U.S. soybeans, sourced from exporters in the Pacific Northwest.
"There has been talk that China has bought maybe up to six cargoes this week," said Ken Smithmier, grains analyst at the Hightower Report in Chicago.
Exporters have been competing for soybeans on the cash market with domestic processors, which are currently reaping high profit margins from crushing raw soybeans into soymeal, a key source of protein in animal feed, and soyoil, used in foods and soy-based biodiesel fuel.
"I think there is a very strong U.S. crush pace, with the big domestic crush margins," said Dan Cekander, analyst at Newedge USA in Chicago.
Traders also noted continued rains in saturated areas of Argentina's crop belt that have stalled corn and soybean planting and could threaten yield prospects. The Commodity Weather Group on Wednesday forecast more rains for next week as well as the 11- to 15-day period.
In neighbouring Paraguay, the No. 4 global soy supplier, the country's senate approved a bill Tuesday that would impose a 10 per cent tax on soybean exports.
"You've got maybe the first sign that traders need to not be complacent with political risk in South America," Smithmier said, adding, "The market is realizing that maybe we need to put a bit of risk premium back in."
Soybeans drew background support after Statistics Canada reported Canadian production of canola, a competing oilseed, at 13.3 million tonnes, below an average of trade estimates for 13.7 million.
CBOT corn futures were boosted by weekly data from the U.S. Energy Information Administration showing that U.S. production of corn-based ethanol rose about four per cent in the latest week, to 835,000 barrels per day, ending a string of declines.
"The weekly ethanol production showed a nice rebound higher. I thought that was supportive for corn," Cekander said.
Wheat followed corn and soybeans higher but gains were limited after Statistics Canada reported that Canada's wheat harvest was the second-largest in 16 years, at 27.2 million tonnes.
The large Canadian wheat crop should help offset threats to other global wheat suppliers including Argentina, which has been plagued by excessive rains, and Australia, which trimmed its wheat production estimate this week due to dry weather.
-- Julie Ingwersen covers agricultural commodity markets for Reuters in Chicago. Additional reporting for Reuters by Ivana Sekularac in Amsterdam and Colin Packham in Sydney.