CHICAGO / Reuters – U.S. wheat futures rallied nearly 2 per cent on Thursday, supported by a round of short-covering and signs of improving export demand, traders said.
A pickup in exports also boosted corn futures, as technical buying lent further support to both corn and wheat after prices dipped during the overnight trading session.
“That fear of a large net-short position is really rallying the wheat market, and corn followed,” said Dan Basse, president of AgResource Company. “And no one’s sure if the funds are done.”
Soybean futures sagged on Thursday, weighed down by improving crop weather in Brazil.
Soybean prices also slumped on news that Chinese customers have temporarily stopped buying distiller’s dried grains amid worries that Beijing may launch a new anti-dumping probe into imports of the feed ingredient.
“The bottom line is, right now, there’s no reason to buy soybeans today,” said Karl Setzer, risk management team leader for MaxYield Cooperative in Iowa.
At the Chicago Board of Trade, soft red winter wheat futures for December delivery closed up 9 cents at $5.15 a bushel. CBOT December corn closed 4 cents higher, or 1 percent, at $3.80 a bushel.
The U.S. Agriculture Department on Thursday morning said weekly wheat export sales for the 2015/16 marketing year totaled 550,300 tonnes, slightly above the high end of a range of market forecasts. Weekly corn export sales of 708,800 tonnes also topped expectations.
Concerns about dry conditions in the Black Sea area and western Australia added to the strength in wheat.
The wheat market remained rangebound, hitting resistance below the weekly high, as the firm dollar still made it hard for U.S. offerings to gain traction with major importers. There was no U.S. wheat offered in Egypt’s latest tender for the grain, issued on Wednesday.
CBOT November soybeans closed down 2-3/4 cents, or 0.4 per cent, at $8.78-3/4 a bushel.
“We are looking at rains in Brazil, which should be helpful for soybean planting,” said Ole Houe, an analyst at brokerage IKON Commodities in Sydney.
Rains in Brazil will help farmers planting a soybean crop that is expected to produce a record 100 million tonnes. Dry weather earlier had slowed planting in top producing regions.
Additional reporting by Naveen Thukral in Singapore and Sybille de La Hamaide in Paris.