Chicago | Reuters — U.S. wheat and soybeans were narrowly higher on Wednesday, rebounding from losses earlier in the session on support from bargain buying and active spread trading after prices tumbled following a bearish government crop report released on Tuesday.
Corn futures trimmed losses but still finished lower at the Chicago Board of Trade, weighed down by the largest stockpiles of grain-based ethanol in more than two years.
Bull spreading in soybean futures was linked to gains in U.S. cash markets, with shippers on the U.S. Gulf Coast eager for supplies before global buyers turn attention to record harvests in South America.
“Soybeans are seeing most of the volume in spreads,” said independent trader Ken Smithmier. “Firmer soy basis and the positions rolling are helping to spike the (March-May soy spread).”
CBOT March soybeans gained 8-3/4 cents to $9.77 per bushel, recovering after falling to a one-week low of $9.66 earlier in the session (all figures US$). March futures’ discount to the May contract shrank to 3-3/4 cents, with the spread trading at its widest levels since June.
It also was the fourth day of the five-session Goldman roll, in which index funds roll long positions from nearby contracts into deferred months.
CBOT March wheat was up four cents at $5.25-3/4, while CBOT March corn edged 2-1/4 cents lower to $3.85-3/4.
Investors who had squared positions ahead of Tuesday’s U.S. Department of Agriculture monthly crop report were resuming dealings, while some traders also were exiting short bets.
Still, USDA forecasts for big global stockpiles of wheat, corn and soybeans were likely to anchor gains.
“Soybeans are seeing some support today from the USDA’s lowered forecasts of U.S. soybean stocks plus rising demand for U.S. soybeans in export markets,” said Frank Rijkers, agrifood economist at ABN AMRO Bank. “However, the recovery in soybean prices is limited with the USDA still forecasting large world supplies.”
— Michael Hirtzer reports on ag commodity markets for Reuters from Chicago.