Chicago | Reuters — U.S. wheat futures were narrowly higher on Tuesday, rising in a short-covering bounce after tumbling to their lowest levels since June of 2010 earlier in the session.
Bargain buying, coupled with a weaker dollar, offset pressure from stable U.S. crop conditions and recent rains in dry portions of the southern Plains.
A massive net short position held by speculative investors continued to anchor Chicago Board of Trade (CBOT) wheat futures amid plentiful global grain supplies and cheaper offerings out of Europe and the Black Sea region.
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“When you look at when the lows were made, they were rejected fairly quickly and we ran into some short-covering,” said EFG Group analyst Tom Fritz. “It’s short-term oversold.”
Corn was narrowly mixed near a six-month bottom, offset by factors such as favourable U.S. weather and technically oversold futures.
Dry conditions forecast for the next 10 days or so in the U.S. Midwest should allow farmers to plant corn rapidly, limiting the potential for a switch to soybean seeds, which have a shorter growing season.
“It doesn’t look like we’re going to have areas that are drowned out of corn and put into beans,” said CHS Hedging analyst Joe Lardy.
Soybean futures jumped to a three-week high, before paring gains, on expectations of minimal corn-to-soy switching. Also, the U.S. Department of Agriculture said earlier that exporters sold 390,000 tonnes of U.S. soybeans for shipment to unknown destinations during the 2015-16 marketing season.
CBOT May wheat finished 1-1/4 cents higher at $4.71-1/2 per bushel after earlier falling as low as $4.60 (all figures US$).
Wheat prices in Russia and Europe were lower, respectively, on ideas that Moscow will remove a wheat export tax and crop-friendly rains in France and Germany.
CBOT corn for May delivery settled up 1/4 cent at $3.61 per bushel, while May soybeans were 4-1/2 cents higher at $9.77-1/2.
— Michael Hirtzer reports on grain markets for Reuters from Chicago. Additional reporting for Reuters by Gus Trompiz in Paris and Naveen Thukral in Singapore.
