U.S. grains: Corn, wheat firm on bargain buying, U.S. dollar

(FIle photo by Allan Dawson)

Chicago | Reuters — U.S. corn and wheat futures closed higher on Tuesday on bargain-buying a day after both markets fell to two-week lows, and on a weaker dollar, which tends to make U.S. grains more competitive globally, traders said.

Soybeans closed higher, bouncing back from a 2.5 per cent decline a day earlier. But trade was choppy, with soybeans pressured at times by benign crop weather in South America and long liquidation.

Chicago Board of Trade March corn settled up two cents at $3.59-3/4 per bushel (all figures US$). March wheat ended up 6-3/4 cents at $4.20-3/4 a bushel and March soybeans rose 1-3/4 cents at $10.24-1/2 a bushel.

Corn firmed as the weaker dollar bolstered U.S. export prospects. The greenback tumbled against key rivals and was on course for its worst month since March after U.S. President Donald Trump commented on currency devaluation by other countries and his trade adviser remarked on the euro.

The dollar’s retreat comes several weeks ahead of the South American corn harvest.

“The Argentine crop doesn’t come at us until late March-early April, so we still have the export window here,” said Don Roose, president of U.S. Commodities.

The market also appeared to draw support from a slowdown in U.S. and South American farmer selling this week, following an influx of sales last week as CBOT corn set multi-month highs.

CBOT wheat firmed on short-covering, climbing to the day’s highs in the final minutes of the session as traders squared positions on the last trading day of the month.

Soybeans ended higher after a seesaw session, but gains were capped by improving South American crop weather and the fact that commodity funds have already built their biggest net long position in soybean futures since mid-July.

Worries about flooding in Argentina’s soy belt lifted soybean futures to a six-month high on Jan. 18, but values have since retreated.

“The market put in an awful lot of risk premium on potential concerns with weather problems. (But) we are moving into a more normal pattern in Argentina,” Roose said.

For the month, soybeans climbed 2 percent, recouping some of December’s losses, and corn gained 2.2 per cent. Wheat rose 3.1 per cent in January, rising for a second month.

— Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Sybille de La Hamaide in Paris.

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