U.S. grains: Corn jumps to three-week high on big export sales

Chicago | Reuters — U.S. corn climbed 1.6 per cent to its highest in nearly three weeks on Thursday, lifted by large export sales, while wheat futures also rose as grain prices rebounded after two sessions of declines.

Soybean futures edged lower at the Chicago Board of Trade, pressured by export sales results showing further evidence that demand was shifting seasonally to freshly harvested South American supplies.

Traders in each pit were squaring positions ahead of the U.S. Agriculture Department’s quarterly grain stocks and annual spring plantings reports due on Monday, a day that also marks the last trading session of the month and quarter.

“Corn prices were trading lower until the release of better-than-expected export sales lifted the market into slightly positive territory,” Art Liming, a market strategist at Citigroup in Chicago, said in a note to clients. “Large sales were booked to Egypt last week, likely replacing Black Sea origin.”

In its weekly export sales release early on Thursday, USDA pegged corn sales last week at 1.4 million tonnes, roughly double the high end of analysts’ expectations that ranged from 525,000 to 725,000 tonnes.

Egypt accounted for 431,000 tonnes of the corn sales and was the largest buyer for the week. That country typically purchases the bulk of their corn needs from Black Sea shippers such as Ukraine. But political turmoil in the region has led to increased demand from the U.S., the No. 1 corn producer and exporter.

CBOT May corn futures gained 7-1/2 cents to $4.92 per bushel, finishing just below their session high of $4.92-3/4, the highest level on a continuous chart since March 7 (all figures US$).

CBOT May wheat ended 13-3/4 higher cents at $7.10-1/2 per bushel, a gain of two per cent.

Investment funds bought 10,000 corn contracts, 7,000 wheat contracts and sold 2,000 soybean contracts, trade sources said.

“We really could not push this market lower,” Shawn McCambridge, analyst at Jefferies Bache in Chicago, said of wheat. “We went through yesterday’s low and just did not have the selling interest. I do think a lot of it is being supported by the funds, and as long as they want to defend these long positions, going into the end of the month and the quarter, it is going to be hard to pressure this market.”

Soybeans for May delivery eased 3-1/2 cents to $14.36-1/2 per bushel, snapping what had been a three-session streak of gains.

USDA showed soybean export sales last week of just 11,900 tonnes, near the marketing-year low notched in mid-February. Many international buyers such as top global importer China are sourcing the bulk of their beans from Brazil and Argentina.

But analysts widely expect USDA to show razor-thin U.S. stockpiles in the report next week, and further reductions in global demand for U.S. soybeans are needed for the government to maintain current supply and demand forecasts.

“The strong pace of demand during the Sept.-Feb. period has ensured we will have historically low March 1 stocks, thus leaving the requirement to ration demand in the second half of the season,” Macquarie analysts said in a note.

Many investors were evening their books in advance of Monday’s crop reports, releases that typically result in a spike in volatility.

“It’s just positioning ahead of the reports,” Brian Basting, analyst at Advance Trading in Bloomington, Illinois, said of Thursday’s grain trading activity.

— Michael Hirtzer reports on ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Julie Ingwersen in Chicago, Gus Trompiz in Paris and Naveen Thukral in Singapore.



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