Chicago | Reuters — U.S. corn and wheat futures firmed on Tuesday as traders adjusted positions ahead of a monthly U.S. government crop report, traders said.
Soybeans settled nearly flat, paring early advances. But all three markets were able to withstand pressure from weaker energy markets and a stronger dollar, which tends to make U.S. grains less attractive on the world market.
At the Chicago Board of Trade, December corn settled up 2-1/4 cents at $3.45-1/2 per bushel (all figures US$). December wheat ended up 3-1/2 cents at $4.07-1/4 a bushel and November soybeans settled down 1/4 cent at $9.54-1/4 a bushel.
Commodity funds hold net short positions in CBOT corn and wheat, leaving those markets susceptible to short-covering rallies, particularly with the U.S. Department of Agriculture’s October supply/demand report due on Wednesday.
“The dominant issue is positioning ahead of the report, and it’s a quieter trade because of that. You have got big yields out here, but people want to cover at these values, just in case,” said Don Roose, president of U.S. Commodities in West Des Moines, Iowa.
Analysts surveyed by Reuters on average expected USDA to lower its estimate of the U.S. 2016 corn yield from 174.4 bushels per acre in September to 173.5, which would still be an all-time high.
Analysts expect the government to raise its U.S. soybean yield estimate to 51.5 bushels per acre, up from USDA’s September figure of 50.6, also a record high.
CBOT soybeans drew support from the USDA reporting export inspections of U.S. soybeans in the latest week at 1.8 million tonnes, above a range of trade expectations for one million to 1.2 million tonnes.
But pressure from the ongoing harvest of large U.S. soy and corn crops hung over the market, limiting rallies.
After the close, USDA said the U.S. corn harvest was 35 percent complete by Sunday, behind the five-year average of 38 per cent, and the soybean harvest was 44 per cent complete, lagging the five-year average of 47 per cent.
The latest figures fell short of analyst expectations for corn harvest progress to reach 38 per cent and soybeans to reach 48 per cent.
CBOT wheat drew support from technical buying including fund short-covering.
“We are not talking about a rally, it is just rising from multi-year lows,” said Phin Ziebell, agribusiness economist at National Australia Bank.
CBOT wheat is recovering from a 10-year low reached in late summer when the market was hit by expectations for rising U.S. inventories and record global supplies, leading investment funds to add to large short positions.
— Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting by Naveen Thukral in Singapore and Gus Trompiz in Paris.