U.S. grains: Corn, soy up as export data sparks short-covering

Chicago | Reuters — U.S. corn futures climbed nearly two per cent on Thursday, hitting a one-week high as higher-than-expected weekly export sales and prospects for U.S. harvest delays sparked a round of short-covering, analysts said.

Soybeans also rose about two per cent, while wheat futures posted modest gains after a choppy session.

Chicago Board of Trade December corn settled up 6-3/4 cents at $3.52-1/2 a bushel after reaching $3.56-1/4, its highest since Sept. 12 (all figures US$).

November soybeans ended up 20-1/4 cents at $8.50-1/4 a bushel after posting a near-four-week top at $8.55, while December wheat finished up 1-1/2 cents at $5.24.

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Corn led the way up after the U.S. Department of Agriculture reported weekly export sales of U.S. corn at nearly 1.4 million tonnes, topping a range of trade expectations.

Through its daily reporting system, USDA also said private exporters sold an additional 160,020 tonnes of U.S. corn to Mexico.

As well, heavy rains in the past day caused localized flooding in parts of the northwest Corn Belt, the Commodity Weather Group said, stalling harvest activity.

“It’s all about short-covering,” said Tom Fritz, a partner with EFG Group in Chicago.

“Corn export sales were pretty decent, based on expectations. Soybean sales were decent. You had some really big rain go through,” Fritz said, adding: “You couple that with the degree that the spec is short, and it’s like, ‘We better get some of this covered.'”

Commodity funds were net buyers of an estimated 28,000 CBOT corn futures contracts, 14,000 lots of soybeans and 2,000 lots of wheat, traders said.

Weekly U.S. soybean export sales topped 900,000 tonnes, surpassing trade expectations and helping buoy the futures market, two days after the most active CBOT soybean contract hit its lowest in 10 years.

“Soybeans still have some significant fundamental obstacles with the China trade war, African swine fever (in China’s hog herd) and a massive record harvest in front of us. Yet nobody wants to be the last one to recognize a bottom, leading to strong volume in today’s action,” INTL FCStone chief commodities economist Arlan Suderman wrote in a client note.

CBOT wheat futures closed higher but pared gains in choppy trade after the December contract failed to push through chart resistance at its 200-day moving average.

A weaker U.S. dollar lent support, theoretically making U.S. grains more competitive on the global market.

The wheat market has been underpinned by crop losses in some major exporting countries, including Australia, and a run of import tenders.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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