U.S. grains: Corn, soy steady on technicals after big gains

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters — U.S. corn and soybeans edged higher on Wednesday while wheat prices were slightly lower at the Chicago Board of Trade, with all three markets steadying after hitting multi-week peaks in the previous session following a bullish U.S. Department of Agriculture supply report.

CBOT March wheat reached a fresh 2-1/2 week high before reversing lower as traders took profits in the wake of the USDA report showing the second smallest U.S. winter wheat plantings since before the First World War.

The government also showed slightly smaller-than-expected supplies of corn and soybeans, sending prices sharply higher. However, global grain and oilseed supplies remained ample while Brazil was likely to harvest the biggest soybean crop in history in the coming months.

“The markets, especially wheat and corn, are taking a breather following the sharp gains on Tuesday caused by the USDA forecasts,” said Frank Rijkers, agrifood economist at ABN AMRO Bank. “The USDA forecasts are still being absorbed and assessed by the market but there is profit taking today with some of the price rises on Tuesday seen as excessive.”

CBOT wheat for March delivery finished down 3-1/4 cents at $4.78 per bushel, a 0.7 per cent decline after rising 2.6 per cent on Tuesday (all figures US$).

USDA estimated U.S. winter wheat plantings below expectations and at its smallest area since 2010.

“The survey is quite a shock for a market that, based on pre-publication surveys, was expecting an inconsequential fall,” said Tobin Gorey, director of agricultural strategy, Commonwealth Bank of Australia.

CBOT March corn was up 1-1/4 cents at $3.58 and CBOT March soybeans up 5-1/2 cents to $8.80, with each contract failing to surpass the highs from Tuesday.

USDA had lowered its estimate of last year’s U.S. corn crop, sparking a wave of short covering on Tuesday.

USDA decreased its estimate of the U.S. 2015 soybean harvest to 3.93 billion bushels from 3.981 billion previously, and cut its forecast of 2015-16 soy ending stocks to 440 million bushels, from 465 million bushels last month.

China, the world’s largest soy buyer, imported 9.12 million tonnes of soybeans in December, up 23.4 per cent from 7.39 million tonnes in November, Chinese customs data showed.

Prices were buoyed by the massive net short position held by speculative investors, with government data late last week showing a record net short in CBOT wheat.

Michael Hirtzer reports on agriculture and ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Michael Hogan in Hamburg and Colin Packham in Sydney.

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