U.S. grains: Corn rises most in three weeks on big export sales

Chicago | Reuters — U.S. corn futures jumped 1.4 per cent for their largest gains in about three weeks on Thursday after government data showed larger-than-expected export sales, analysts said.

Soybean and wheat also rose at the Chicago Board of Trade, rebounding from recent lows amid strong weekly export sales results for the crops in a U.S. Agriculture Department report.

CBOT March corn settled six cents higher at $4.33-1/2 per bushel, touching the highest level in two weeks and closing in on their first two-month streak of gains in 1-1/2 years (all figures US$).

“We were the cheapest corn in the world, just below Ukraine, and it certainly showed up in the export sales,” said U.S. Commodities analyst Don Roose. “Bull spreads have been working on corn, so the market told you we were fighting for value.”

U.S. exporters sold 1.8 million tonnes of corn last week, the largest amount in the current 2013-14 marketing season. Top global corn buyer Japan purchased 797,800 tonnes of the grain, USDA data showed.

The dip in prices earlier this month to the lowest level in 3-1/2 years has made corn more competitive in global markets even as the strong demand has lifted futures by more than six per cent since hitting the low watermark on Jan. 10.

“We’re in a market that’s moving to the top of the trading range — there’s a little resistance all the way,” Roose added.

Corn futures hit a session high of $4.34-1/2 before hitting resistance at their 100-day moving average.

CBOT March soybeans finished 5-3/4 cents higher at $12.75 per bushel, a gain of 0.5 percent after earlier trading as low as $12.60. Soybeans ran into resistance at their 200-day moving average.

U.S. soybean exports of 494,800 tonnes were below analyst expectations in a Reuters poll but some traders were bracing for a net negative result as importers “switch” supplies to Brazil.

“I did math on switches versus unknown cancellations, and it came out to minus 56,000 tonnes, which is essentially one cargo. It wasn’t a big stampede, like some people were trying to claim last week,” said Doane Advisory Services soy analyst Bill Nelson.

The surge in corn futures coupled with the positive export results helped lift soy futures from their 2-1/2 month low notched early in the trading session amid harvest in Brazil.

“We are going to see increasing availability of South American (soy) supplies in the coming weeks which is going to relieve the near-term supply tightness,” said Luke Mathews, commodities strategist at the Commonwealth Bank of Australia.

In Brazil, strong yields in the country’s top soy-growing state Mato Grosso should guarantee a record harvest for the country in the 2013-14 crop year.

The U.S. Department of Agriculture attache in Brazil on Tuesday estimated the 2013/14 soybean crop there at 89.5 million tonnes, above the USDA’s official forecast of 89 million tonnes and sharply up from 81.6 million tonnes last year.

CBOT March wheat firmed by two cents to $5.53-1/2 per bushel, recovering somewhat after hitting the lowest level since July 2010 in the previous session.

Dan Cekander, analyst at Newedge USA, said, the strength in wheat was “subdued after yesterday’s weak technical action.”

“It’s hard to generate enthusiasm there,” he said.

U.S. exports of all varieties of wheat totalled 794,900 tonnes, the largest since September and above the high end of analyst estimates that ranged from 300,000 to 500,000 tonnes.

— Michael Hirtzer reports on agriculture and ag commodities for Reuters from Chicago.

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