Chicago | Reuters — U.S. wheat and corn futures extended gains to set multi-month highs on Friday on follow-through buying after the U.S. Department of Agriculture slashed domestic stockpile estimates in a monthly report on Thursday.
Soybeans also were higher as investors defended their net long position despite expectations for a record-large harvest in top producer Brazil.
Chicago Board of Trade March wheat finished 5-1/2 cents higher at $4.49 per bushel, the highest on a continuous chart since June 28 (all figures US$). Wheat gained four per cent for the week, the biggest such gain since October.
“USDA increased wheat exports by 50 million bushels,” said analyst Joe Christopher of the Crossroads Co-op in Nebraska. “That caught everyone’s attention.”
Farmers were selling wheat to take advantage of the higher prices, Christopher added.
USDA cited increased wheat export shipments to support its estimate of smaller stocks.
The government cut its corn supply outlook due to increased use in ethanol production and held its U.S. soybean forecast steady.
CBOT March corn settled up five cents at $3.74-1/2 a bushel, its highest since July 16, and gained 2.3 per cent for the week.
Corn futures were holding above their key 200-day moving average. “The corn market, technically speaking, made a good trade when they took out the 200-day,” Christopher said.
CBOT March soybeans were up 8-1/2 cents at $10.59 per bushel after reaching a 2-1/2-week high of $10.63-1/2. Prices rose three per cent for the week.
USDA cut its estimate of world wheat ending stocks for 2016-17, largely due to reduced harvest estimates for India and Kazakhstan, although global inventories would still be at a record.
“Lower inventories are obviously a plus for prices,” said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia. “Yet we are somewhat skeptical that the news is worth an extra two-and-a-half to three per cent on wheat prices.”
In Europe, March milling wheat on Euronext reacted to Thursday’s close in Chicago to extend gains and touch its highest since August at 172.75 euros a tonne.
— Michael Hirtzer reports on ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Gus Trompiz in Paris and Naveen Thukral in Singapore.