U.S. grains: Wheat rallies late, ends up on fund buying

(Lisa Guenther photo)

Chicago | Reuters — U.S. wheat futures rallied 2.6 per cent on Thursday, ending a choppy trading session with a late-day surge on short-covering and fund buying amid talk of a slowdown in exports from Russia.

Corn futures rose to a one-month high on strong export sales and technical buying, but prices closed below their peaks on a lack of follow-through buying amid plentiful supplies.

Soybeans rose to recoup some losses from Wednesday, when the market shrugged off a cut in the U.S. Department of Agriculture’s estimate of U.S. stocks and focused on the improving chance of bumper crops in South America.

“Volatility is the rule today,” said Brian Basting, analyst at Advance Trading in Bloomington, Illinois.

A media report that Russia’s agriculture ministry may raise grain intervention prices to slow exports was dismissed by many traders, but was enough to trigger short-covering and a fund buying surge in wheat futures.

The rally came even though U.S. prices remain uncompetitive in the world market. U.S. wheat was not in contention in the latest snap tender by Egypt’s government buyer GASC, which purchased Russian and French wheat on Thursday.

The U.S. Department of Agriculture on Thursday reported last week’s U.S. all-wheat export sales at 442,300 tonnes, in line with trade expectations.

Chicago Board of Trade March wheat gained 15-3/4 cents, or 2.7 per cent, to $5.97-1/2 a bushel after earlier hitting a 1-1/2 week low of $5.72-3/4 (all figures US$).

Strong export sales data released by USDA fuelled early strength in corn and soybeans.

Corn sales last week were pegged at 962,800 tonnes and soybean sales were 810,300 tonnes, both near the high end of trade expectations.

CBOT March corn rose 4-3/4 cents, or 1.2 per cent, to $3.98-1/2 per bushel after earlier hitting a one-month high of $4.01. The contract climbed above its 150-day moving average of $3.98 and closed near that level.

CBOT January soybeans added 10-1/4 cents, or one per cent, to $10.42-1/4 a bushel.

Commodity funds bought an estimated net 7,000 wheat contracts on the day along with 6,000 contracts each of corn and soybeans, trade sources said.

— Karl Plume reports on ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Colin Packham in Sydney and Gus Trompiz in Paris.

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