U.S. grains: Corn, soy, wheat bounce on bargain buying, weather concerns

Chicago | Reuters — Chicago Board of Trade corn, soybean and wheat futures rose on Friday, rebounding from losses earlier in the week that pushed prices to contract lows on a round of bargain buying and short-covering, traders said.

“We have been beaten up ever since we came back from Labour Day weekend,” said Dewey Strickler, president of grain consultancy Ag Watch Market Advisors. “We are due to get a little recovery, and that is exactly what we have done. Long story short, that’s it.”

Corn and soybeans posted the biggest gains, receiving additional support from afternoon forecasts that raised the prospects of freezing weather that could damage crops in northern areas of the U.S. Midwest next week.

“The market decided to put a little risk premium into prices before the weekend with continued forecasts for frost in the northern belt late next week,” Charlie Sernatinger, analyst with ED+F Man Capital, said in a note to clients.

Concerns about harvest delays for the spring wheat crop and quality concerns following rains in the Northern Plains boosted wheat futures.

“The spring wheat harvest just continues to plod along at an extremely slow pace,” said Mike Krueger, president of The Money Farm, a grain marketing advisory service in Fargo, N.D. “I think we are losing quality. When all is said and done, I think it will be a question of test weight and those sorts of factors.”

CBOT soft red winter wheat for December delivery settled up five cents at $5.35-1/4 a bushel, snapping a streak of four straight negative sessions (all figures US$). MGEX December spring wheat rose 3-1/2 cents higher to $6.11-1/2 a bushel.

CBOT November soybeans were 18-1/4 cents higher at $10.21-1/2 a bushel. CBOT December corn, which also had fallen for four days in a row, rose 9-1/2 cents to $3.56 a bushel.

Corn and soybeans had touched four-year lows in the previous session as the approach of what are expected to be record U.S. corn and soybean harvests fueled selling.

Wheat also received support on Friday from news that Russia’s agriculture ministry had proposed a curb on grain exports to balance the domestic market in a letter to the government, although the ministry later denied this.

“The first thing you see today is a technical rebound on the market,” Frank Rijkers, agrifood economist at ABN AMRO Bank, said. “On the other hand, you see some nervousness about (Russian) trading restrictions.”

A letter seen by Reuters and Russia’s Grain Union contained proposals to halt or limit grain exports in 2014-15 if they reached 26.9 million tonnes, a ceiling below forecasters’ estimates of Russian exports. The agriculture ministry said it did not send the letter.

— Mark Weinraub is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Colin Packham in Sydney and Gus Trompiz in Paris.

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