U.S. grains: Prices rise on short-covering, slow loadings in Brazil

Chicago | Reuters –– U.S. soybean futures climbed to a 1-1/2-week high on Tuesday while wheat and corn each gained about one per cent, boosted by investor short-covering and a backlog of export loadings at Brazilian ports.

Prices rose as trade resumed following a three-day weekend due to Monday’s U.S. Presidents Day holiday. They were lifted in part by U.S. Commodity Futures Trading Commission data released after the close of trading on Friday showing speculative investors expanding short, or bearish, bets.

“Everybody wants to talk about (CFTC’s) Commitments of Traders report of last Friday, and talk about the net short position increase in corn, beans and wheat as a reason for the bounce, along with a little bit of the macro tailwind. And that’s seemingly where they are at,” said AgResource Co. analyst Dan Basse.

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Chicago Board of Trade soybeans for March delivery settled up seven cents at $8.79-3/4 per bushel (all figures US$). March beans gained on deferred contracts such as May and July futures, with the bull-spreading suggesting strong prompt demand.

Soy prices tumbled to their session lows at midday, when the National Oilseed Processors Association said U.S. crushings in January totaled 150.453 million bushels, below trade estimates averaging about 154.557 million bushels.

But futures recovered to finish at the highest levels since Feb. 4.

The lineup of Brazil export loadings of soybeans and corn was double that of a year ago as rains delayed shipments, particularly for Paranaguá, and a weak real currency boosted demand.

Some traders expected China, the world’s biggest soybean importer, to step up purchases following last week’s Lunar New Year and a pre-holiday decline in imports during January.

The slow pace of loadings in Brazil was seen only as a potential short-term boost to prices while global stockpiles of grains and oilseeds remained ample. The dollar surged about one per cent against a basket of currencies, making U.S. goods less attractive in global markets.

Egypt on Saturday canceled a tender to import wheat, the third such cancellation this month and a move that prompted some trader worries of reduced volumes to the world’s biggest wheat importer.

Wheat prices were consolidating above last week’s contract lows and corn above four-week lows, but the supply and demand outlook remained bearish, analysts said. CBOT March wheat finished up 6-3/4 cents at $4.64-1/4 per bushel and CBOT March corn up 4-1/4 cent at $3.63 per bushel.

“I don’t see wheat falling from here but I don’t see it rallying much,” said Stefan Vogel, head of agricultural commodity research at Rabobank. “It’s now a case of getting the Egyptian market running again and finding other outlets.”

Michael Hirtzer reports on agriculture and ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Julie Ingwersen in Chicago, Naveen Thukral in Singaore and Gus Trompiz in Paris.

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