By Jesse Newman 
 

CHICAGO--U.S. grain and soybean futures advanced Tuesday, buoyed by adverse world weather and investor short-covering ahead of a major government report.

Wheat prices gained, boosted in part by reports of unfavorable weather in rival grain-producing regions like the former Soviet Union and Australia, which could dent crop yields, limiting world supplies. Cold, dry conditions persist in the former Soviet Union, where growers are planting winter crops, while dryness and heat are threatening wheat crops in Australia, where harvest has just begun.

Prices for the grain also rose after the U.S. Department of Agriculture in a weekly report on Monday said U.S. winter-wheat was 49% planted as of Sunday, behind the 54% at this point in 2014, and the 51% average for the previous five years. Wheat futures drew further strength from a Sept. 30 report showing U.S. stockpile and production estimates below analysts' expectations, analysts said.

"People are still waking up to data from last week showing the 2015 crop is substantially less than we thought," said Bill Nelson, a senior economist with agricultural-research firm Doane Advisory Services in St. Louis. Mr. Nelson added that "every three to four years there's a pretty harsh setback in production" in the Black Sea Region. This year's wheat crops are "not off to a very good start," he said.

Wheat futures for December delivery rose 8 cents, or 1.6%, to $5.23 1/2 a bushel at the Chicago Board of Trade.

Meanwhile, corn and soybean prices climbed, buoyed by investor short-covering ahead of a closely watched crop report due out Friday in which the government may cut estimates for harvested acres this fall, possibly reducing the size of the nation's crops. Some traders who held short positions in corn and soy futures, or had bet on price declines, exited those wagers by buying futures Tuesday, which in turn helped push markets higher, analysts said.

Corn prices also drew support from higher wheat prices, as well as data from the government showing U.S. growers so far have harvested about 27% of the nation's corn crop, behind the 32% average from 2010 to 2014.

CBOT December corn added 3 1/4 cents, or 0.8%, to $3.96 3/4 a bushel.

Soybean prices rose, also bolstered by an improving demand outlook for the U.S. crop, a lower U.S. dollar and higher global stock markets.

"In the short run, I'm encouraged by the export data," said Mr. Nelson, adding that "we'll be ramping up shipments and shipping as fast as we ever can over the next couple months."

Still, better-than-expected yields capped gains in the market, analysts said. Improving crop condition ratings and the quick pace of the U.S. harvest also weighed on the market.

CBOT November soybeans advanced 7 1/4 cents, or 0.8%, to $8.91 1/2 a bushel.

Write to Jesse Newman at jesse.newman@wsj.com

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(END) Dow Jones Newswires

October 06, 2015 12:09 ET (16:09 GMT)