Chicago | Reuters — U.S. wheat futures rose about one per cent on Tuesday on a pickup in global export business and short-covering ahead of several key U.S. Department of Agriculture reports due on Wednesday, traders said.
Corn and soybean futures edged higher ahead of the reports, which will include updated estimates of U.S. 2021 crop production and Dec. 1 inventories. Worries about crop weather in South America and rising crude oil prices also lent support.
Chicago Board of Trade March wheat settled up 8-1/4 cents at $7.70-1/4 after reaching $7.70-1/2, the contract’s highest since Jan. 5 (all figures US$).
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CBOT March corn ended up 1-1/4 cents at $6.01 a bushel and March soybeans finished up 1-3/4 cents at $13.86-1/2 a bushel.
Wheat futures rallied, extending a recovery from multi-month lows set last week, as Algeria, Turkey and Japan sought wheat on the world market.
“Global import tenders are starting to pick up a little bit. And we are seeing follow-through short covering from yesterday. That’s likely because of positioning ahead of tomorrow’s report,” said Terry Reilly, senior analyst with Futures International.
Analysts surveyed by Reuters on average expect USDA on Wednesday to report the tightest U.S. Dec. 1 wheat stocks since 2007. The Reuters polls also projected the largest U.S. winter wheat seedings since 2016, although Reilly noted dry conditions and a lack of snow cover across the Plains winter wheat belt.
“Even if we come in above trade expectations on winter wheat plantings, we still have to keep an eye on the weather,” Reilly said.
Corn and soybean futures firmed on positioning ahead of USDA’s reports and uncertainty about South American crop prospects.
Brazilian food supply and statistics agency Conab lowered its estimate of Brazil’s 2021-22 soybean crop to 140.5 million tonnes, from 142.8 million previously. Conab was more conservative than private consultancies, which last week cut soy output projections by much larger volumes.
Hot, dry weather has threatened crop prospects in Argentina and southern Brazil.
“The weather forecast… suggests some rainfall on the South American continent, which would however remain very insufficient, mainly in Argentina in view of the very high temperatures observed,” consultancy Agritel said in a note.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.
