Chicago | Reuters — U.S. soybean futures rose 1.9 per cent on Wednesday on a round of bargain buying following three straight days of declines that pushed the benchmark contract to its lowest since mid-November, traders said.
Corn futures rose for the fourth session in a row as investors staked out positions ahead of annual rebalancing by commodity index funds.
Wheat firmed on support from worsening crop conditions, closing near session highs as technical buyers stepped in to the market when prices rallied through key resistance points.
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U.S. grains: Corn rebounds from contract lows on short covering, bargain buying
Bargain buying and short covering lifted U.S. corn futures on Monday after the market slid to contract lows on expectations for strong U.S. output, traders said.
An easing in the dollar after Tuesday’s 14-year high meant additional support as it makes U.S. commodities cheaper for overseas buyers.
Some concerns about planting delays in Argentina, the world’s third-largest exporter of corn and soybeans, added strength.
But soybeans’ gains came largely came from speculators who saw the recent declines as an opportunity to buy after pulling some money out of the market in late December.
“We got down to the bottom end of the range on beans,” said Don Roose, president of U.S. Commodities in West Des Moines, Iowa. “It was the lowest we have been in a month and half and we get technical buying.”
Chicago Board of Trade March soybean futures settled up 20-1/2 cents at $10.15-1/2 a bushel (all figures US$). It hit its lowest since Nov. 18 during overnight trading.
CBOT March soft red winter wheat was 11-1/4 cents higher at $4.29-1/4 a bushel and K.C. March hard red winter wheat gained 12-1/2 cents to $4.26-1/2 a bushel.
Crop ratings fell in December in parts of the U.S. Plains that endured a cold and dry month, including major hard red wheat growing states Oklahoma and Kansas, data released by the U.S. Department of Agriculture after Tuesday’s market close showed.
CBOT March corn futures were up four cents at $3.59-3/4 a bushel. The most active-corn contract has gained 3.4 per cent during the current winning streak, hitting its highest since Dec. 15.
Corn has found support at the turn of the year from expectations that funds will rebalance portfolios in favour of the cereal.
The managers of both the S+P GSCI and the Bloomberg Commodity Index last autumn announced plans to raise the share of corn and wheat in their indexes for 2017, and the funds typically make those adjustments in January.
— 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.
