Chicago | Reuters –– U.S. soybean and corn futures closed firmer on Tuesday, hitting four-week highs on concerns about rains slowing the early soybean harvest in Brazil and investor hopes of stimulus measures in China, traders said.
Chicago Board of Trade wheat futures followed corn and soybeans higher. Traders also cited technical buying in wheat after European wheat hit contract lows.
But gains in all three commodities were kept in check by plentiful global supplies.
“My read is that this is a bounce in a down-trending market,” said Chad Henderson, a grain market adviser with Prime Agricultural Consultants in Brookfield, Wisconsin.
Chicago Board of Trade soybean futures for March delivery settled up 4-1/2 cents at $8.83-1/2 a bushel, while CBOT March corn ended up 4-1/2 cents at $3.67-3/4 a bushel (all figures US$).
Corn hit its highest since Dec. 22, while soybeans peaked at their highest since Dec. 23.
Traders noted additional support for corn from a round of short-covering and strength in the cash market.
China’s economy grew last year at its weakest pace in a quarter of a century, raising hopes Beijing would cushion the slowdown with more stimulus policies, which in turn prompted a rally on the country’s roller-coaster share markets.
Heavy rains are forecast in Brazil’s centre-west grain belt this week, meteorologists said, helping some newly cultivated areas to recover from last year’s dry weather but raising concerns for farmers who are ready to harvest.
The market has generally been anticipating bumper soybean crops in South America, and the supply pressure has been exacerbated by moves from Argentina’s new government to scale back export barriers.
“The overall supply picture in South America is positive, but you do see a few jitters about weather events and what they can do to crops,” National Australia Bank agribusiness economist Phin Ziebell said.
Traders said large short positions held by investors meant that grain markets were prone to sporadic rallies.
CBOT March wheat futures ended up 3/4 cent at $4.74-1/2, with buying muted by export concerns. MGEX spring wheat contracts and K.C. hard red winter wheat posted modest losses.
Sales of Argentine wheat to the U.S. were cited as a key factor that pushed down European futures to contract lows on Monday.
The U.S. Department of Agriculture said on Tuesday morning that weekly export inspections of wheat came in at 340,842 tonnes, near the low end of market forecasts.
— Mark Weinraub is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Gus Trompiz in Paris.