Chicago | Reuters — U.S. wheat, corn and soybean futures edged higher on Tuesday as investors used the previous session’s sharp declines to take profits on bearish bets they had placed on the commodities sector, traders said.
But concerns about a weaker global economy cutting into demand limited buying and all three commodities closed below session highs.
“The rallies do not last very long due to the remaining current bearish fundamentals,” said Greg Grow, director of agribusiness at Archer Financial Services.
Traders said some cash market sales pulled prices from their peaks when the market showed strength early in the session.
CBOT March wheat settled up 2-1/4 cents at $4.66-3/4 a bushel after the most active contract hit a 5-1/2 year low on Monday (all figures US$). CBOT March corn, which hit a 6-1/2-month low on Monday, ended one cent higher at $3.58-1/2 a bushel.
CBOT March soybeans were up 1-1/4 cents at $8.57-1/4 a bushel.
Regulatory data released on Monday afternoon showed that large speculators held their biggest short positions on record in both wheat and soybeans. The Commodity Futures Trading Commission’s weekly report also showed that the noncommercial traders also boosted their bearish bets in soybeans by 44 per cent as 2015 came to a close.
A bleak fundamental picture, highlighted by weakening U.S. exports and good crop weather in South America raising expectations for a bumper harvest there, kept the gains in check.
“China is a big concern, everyone is more bearish on commodities,” said an agricultural commodities analyst in Australia. “The only thing that seems to be supporting grains and oilseeds (Tuesday) is short-covering.”
Rain in centre-west and northern Brazil this week should ease concerns about the soy crop before harvesting, meteorologists said on Monday.
While condition ratings for winter wheat in Illinois declined during December following heavy rains, more than half the crop was still seen as good to excellent, the U.S. Department of Agriculture said.
— Mark Weinraub is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Sybille de La Hamaide in Paris and Naveen Thukral in Singapore.