Chicago | Reuters — U.S. wheat futures prices jumped nearly one per cent on Wednesday as a recent plunge to four-year lows encouraged investors to cover short positions, after lower prices sparked improved export demand.
Corn and soybean futures also ticked higher in a short-covering bounce from four-year lows, though good weather speeding the harvest of expected record crops in the U.S. Midwest limited gains.
Some investors were beginning to square positions ahead of next week’s U.S. Department of Agriculture quarterly stocks and small grains summary reports, due Tuesday (Sept. 30).
“We’ve exhausted the selling, at least in the short term,” said Shawn McCambridge, grains analyst with Jefferies Bache.
“For the wheat, we are starting to see some demand develop at these price levels. And you’ve got the managed money accounts at near-record short positions right now.”
But abundant global wheat supplies and expectations for stiff export market competition could limit further advances in prices.
December soft red winter wheat futures gained 4-1/4 cents, or 0.9 per cent, to $4.80-1/4 a bushel after hitting a four-year, front-month low of $4.69-1/2 on Monday (all figures US$). December hard red winter wheat added 2-1/4 cents, or 0.4 per cent, to $5.64-1/4 a bushel after sinking to a four-year low of $5.53-1/2 a day earlier.
December corn gained four cents, or 1.2 per cent, to $3.29-1/2 a bushel after notching a fresh four-year low of $3.24-3/4 earlier in the session.
November soybeans rose 1/2 cent to $9.36-3/4 a bushel in a bounce from Tuesday’s four-year low of $9.31.
Weekly USDA export sales data, scheduled for release early on Thursday, is expected to show at least 1.5 million tonnes in soybean sales after a Chinese trade delegation visit to the U.S. last week.
Only light showers were forecast this week in the U.S. Midwest, which should allow farmers to make rapid harvest progress, the Commodity Weather Group said.
Spot basis bids for U.S. corn and soybeans continued to be weak at processors and elevators around the U.S. Midwest as the pace of harvest picked up and with reports of robust yields from early-harvested fields, grain dealers said.
U.S. farmers stepped up deliveries of both crops, providing a long-awaited supply boost in grain-starved areas as old-crop stocks ran thin in recent weeks.
“Corn and soybean crops in the United States continue to get bigger and bigger, which is dragging down prices,” said Graydon Chong, senior grains analyst at Rabobank. “We will continue to see markets soften on the back of very good initial yields.”
— Karl Plume reports on ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Michael Hogan in Hamburg.