Chicago | Reuters — U.S. wheat futures rose on Wednesday, rebounding from a near two-month low with support from a broad rally in commodities and Wall Street equities tied to optimism that the coronavirus epidemic will be contained, traders said.
Corn and soybean futures also advanced.
Chicago Board of Trade March wheat settled up 5-1/2 cents at $5.47-1/2 per bushel, turning higher after a dip to $5.38-1/4, the contract’s lowest since Dec. 16 (all figures US$).
CBOT March corn ended up 3-1/4 cents at $3.83 a bushel and March soybeans rose 7-3/4 cents to settle at $8.92-1/2 a bushel.
“There is some optimism that we’re getting past the worst of the coronavirus, and the stock market is up a little bit, the energy markets (are) firming up,” said Jack Scoville, analyst with the Price Futures Group in Chicago.
China confirmed 2,015 new cases of the deadly virus, the lowest daily increase since Jan. 30 as the total rose to 44,653. The report eased financial market concerns about the potential impact to both the Chinese and global economies, buoying agricultural futures as well.
“There is very little farmer selling down here. It doesn’t take much in the way of commercial buying or spec buying to send (grain futures) a little higher, and I think we are seeing a little bit of both,” Scoville said.
CBOT wheat futures tumbled a day earlier, pressured by long liquidation and a U.S. government forecast of bigger-than-expected world inventories.
The U.S. Department of Agriculture (USDA) in a monthly report on Tuesday trimmed its forecast for 2019-20 world wheat ending stocks to 288.03 million tonnes, nearly unchanged from 288.08 million previously. Analysts surveyed by Reuters on average had expected a bigger reduction to 287.44 million tonnes.
“Wheat prices rallied in January but the world still has ample supplies and it (is) hard for the market to sustain those gains,” said Phin Ziebell, agribusiness economist at National Australia Bank.
CBOT March corn stayed inside of its recent trading range on Wednesday, but March soybeans neared a two-week high as traders waited for information about when China might begin making purchases of U.S. agricultural goods under the Phase One trade deal signed last month.
The coronavirus outbreak could reduce Chinese purchases of U.S. farm goods, White House national security adviser Robert O’Brien said Tuesday.
But China has not informed the United States of any delays or reductions of its planned purchases due to the outbreak, USDA undersecretary of trade Ted McKinney said.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago; additional reporting by Naveen Thukral in Singapore.