Chicago crops built on early gains on Monday, led by wheat, but traders betrayed a lack of conviction that the rises were caused by much other than short-covering ahead of key US Department of Agriculture data.

Outside forces did provide some reason for cheer. The dollar eased a touch, making US exports more competitive, as investors rediscovered some of their appetite for risk. Indeed, European stock markets closed a little ahead.

And the USDA's Brasilia office left its estimate for Brazilian corn production unchanged, at 51.0m tonnes.

That was noteworthy for two reasons: first, the inability of other analysts to resist revising South American production estimates significantly upwards; and second, the imminence of Tuesday's USDA global crop supply and demand report, which is, you guessed it, expected to revise most South American production estimates significantly upwards.

Harvest headway 

In fact, it was the turn of Celeres on Monday to come up with upbeat news about South American crops, saying that Brazilian farmers had harvested 10% of their soy crop, compared with 5% the previous week and 3% a year ago.

In Mato Grosso state, growers have one quarter of their crop in silos, compared with 16% last week and 8% a year ago.

This puts pressure on prices, of course, with harvest setbacks, like last year's Argentine drought, needed to support the soybean market.

And as an extra reason for caution, Celeres said that farmers had flogged only 24% of their crop, down from 32% a year ago, and meaning  that the market has unfinished business with commercial sellers, let alone what funds and speculators think.

Key report 

Still, when Tuesday will bring the USDA's latest monthly crop supply and demand report, which is expected to put US soybean stocks particularly in focus, investors were taking no chances in holding on to short positions.

Vic Lespinasse, GrainAnalyst.com marketwatcher, said: "Even though this isn't a major USDA report, it still could have a strong impact on prices in the morning so many traders do not want to take a large position home overnight."

He estimated funds were buyers of about 3,000 wheat contracts, 8,000 corn lots and 5,000 soybeans lots with half an hour or so of trading to go.

March soybeans added 1.8% to $9.29 ½ a bushel, beating corn, which added 1.3% to $3.56 a bushel, but lagging behind wheat, which jumped 2.3% to $4.84 a bushel.

"We have seen the strongest short covering rally since the January report in the grains today," Darrell Holaday at broker Country Futures said.

Oils slick 

You could have fooled European investors who saw March wheat close up all of £0.05 at £97.50 a tonne in London, although the Paris contract did a little better, adding E1.00 to E126.00 a tonne.

May rapeseed did better, gaining E2.75 to E289.25 a tonne, its best finish since the first week of the year, in line with firm closes for Chicago soyoil (+2.6%) and Kuala Lumpur palm oil, rivals in the vegetable oil market.

Soft commodities were firm too, helped in sugar by bullish forecast revisions by analysts at Kingsman and FO Licht.

March raw sugar settled up 0.43 cents at 26.60 cents a pound in New York, with white sugar for the same month ending $13.50 higher at $738.00 a tonne.

Cocoa was helped by thoughts of fading deliveries from plantations to ports in Ivory Coast, the world's biggest producer of the beans.

New York's May contract ended $53 higher at $3,054 a tonne, with its London equivalent up £15 at £2,214 a tonne.