U.S. grains: Corn bounces from sharp sell-off

CBOT May 2019 corn futures with Bollinger (20,2) bands. (Barchart)

Chicago | Reuters — U.S. corn, soybean and wheat futures rose on Monday, rebounding from Friday’s sell-off spurred by a government report that showed massive supplies of all three commodities remained in storage bins around the country.

Corn notched the biggest gain, with the most active Chicago Board of Trade contract rallying 1.8 per cent after posting its sharpest daily decline since July 2016 on Friday. Fresh forecasts for rain raised concerns about planting delays in the U.S. Midwest, adding to the bullish tone in corn, traders said.

Soybean futures received support from optimism about a trade deal with China after the U.S. Agriculture Department said private exporters reported the sale of 828,000 tonnes of soybeans to China.

It was the second sale announced since the two countries concluded their latest round of negotiations last week to end their trade war and comes ahead of the next round of talks, scheduled for this week in Washington with a Chinese delegation led by Vice-Premier Liu He.

USDA on Monday morning also reported that weekly soybean export inspections were 730,806 tonnes, in line with market forecasts that ranged from 500,000 to 900,000 tonnes. Corn export inspections of 1.259 million tonnes topped analysts’ expectations and wheat export inspections of 418,424 tonnes were in line with trade estimates.

CBOT May corn futures settled up 5-1/4 cents at $3.61-3/4 a bushel (all figures US$).

“You had some pretty good rain in some areas over the weekend,” Jim Gerlach, president of A/C Trading in Indiana. “That is pushing the planting delay narrative.”

There has been uncertainty over the scale of corn planting as flooding in the U.S. Midwest threatened to disrupt field work and push farmers to shift some acreage toward later-planted soybeans.

At least one million acres of U.S. farmland were flooded after a “bomb cyclone” storm left parts of nine major grain-producing states under water, satellite data analyzed by Gro Intelligence for Reuters showed.

Forecasts for more rain that will keep farmers out of the fields in southern areas that typically begin planting in early April underpinned corn prices.

CBOT May soybean futures were up 11-1/4 cents at $8.95-1/2 a bushel.

“A lot of it is some hopes here that we are getting near the end of the line on this U.S.-China thing,” Gerlach said. “There was talk about progress being made.”

CBOT May soft red winter wheat futures were five cents higher at $4.62-3/4 a bushel.

Reporting for Reuters by Mark Weinraub in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.


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