U.S. grains: Corn soars to five-month peak on technicals, fund buying

(Lisa Guenther photo)

Chicago | Reuters — U.S. corn futures surged more than two per cent on Friday, with the benchmark contract rising above US$4 a bushel to its highest in nearly five months, fueled by technical buying and heavy buying by commodity funds.

Wheat futures extended a rally to move above the psychological $6-a-bushel barrier as buying interest from investment funds outweighed signs of a large global supply and uncompetitive U.S. export prices (all figures US$).

Soybeans rebounded from an early profit-taking slump and pressure from falling soymeal to close higher for the eighth time in nine sessions, propelled by fund and technical buying.

“It’s hard to come across a fundamental reason grains are higher. Corn’s got technical momentum, it’s got fund length behind it, and sometimes that’s all you need in quiet markets,” said Jim Gerlach, president of brokerage A/C Trading.

Traders got an unexpected early look at a monthly U.S. Department of Agriculture Farm Service Agency prevented plantings report ahead of Friday’s close. The report, which had been scheduled for release on Monday, showed slight increases in corn, soybean and wheat acres that could not be planted last spring.

Chicago Board of Trade March corn futures climbed nine cents, or 2.3 per cent, to $4.07-1/2 a bushel after earlier hitting a high of $4.10, the highest since July 10. The contract rose for a third straight week, gaining 3.2 per cent.

CBOT December corn expired at midday 6-1/4 cents higher at $3.96-1/4.

CBOT January soybeans were up five cents, or 0.5 per cent, at $10.47-1/4 a bushel. The contract was up 1.1 per cent in the week, its second straight weekly advance.

Commodity funds bought an estimated net 18,000 corn contracts on the day, as well as 4,000 soybean contracts and 5,000 wheat contracts, trade sources said.

USDA confirmed on Friday morning private sales of 110,000 tonnes of U.S. soybeans for shipment to unknown destinations in the 2015-16 marketing year, which begins Sept. 1, 2015.

CBOT March wheat rose nine cents, or 1.5 per cent, to $6.06-1/2 a bushel after earlier climbing as high as $6.13-1/2, the contract’s highest point since July 7. A more than four per cent surge on Thursday and Friday propelled the contract to a 2.1 per cent weekly gain, its third straight rise.

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

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