Chicago | Reuters –– Chicago Board of Trade corn futures gained for the second straight day on Wednesday, as the grain market enjoyed a price bump from investors continuing to cover short positions and as crude oil prices rose.
Front-month CBOT March corn cracked through several moving averages during the day — including the 50-day — and was further helped by a spurt of buying just before the session close.
As crude oil prices climbed on Wednesday, March corn closed at $3.67-1/4, up 4-1/4 cents (all figures US$). The contract’s midday peak of $3.67-1/2 per bushel was the highest level since Feb. 5.
Meanwhile, wheat and soybean contracts also ticked higher, as traders said short covering by investment funds lent some support to the cereal markets, which have been weighed down by large supplies and tepid U.S. exports.
March wheat closed at $4.68-1/2 per bushel, up 4-1/4 cents.
March soybeans closed at $8.82-1/2 per bushel, up 2-3/4 cents.
Open interest in soybean futures jumped on Tuesday, suggesting that new money may be coming into the market on the long side of the grain sector, analyst Charlie Sernatinger of EDF Man Capital Markets wrote in an analyst note Wednesday.
“It appeared as if we got some leftovers on flow today,” he wrote.
The oilseed market also is being boosted by higher than expected volumes in the past week for U.S. export sales and port inspections, plus a backlog of cargo loadings in rival exporter Brazil.
But broadly favourable weather for developing soy crops in Argentina and Brazil, along with harvest progress in Brazil, continue to make investors wary of possible market impacts amid the expected bumper production in South America.
Wheat traders say they are continuing to monitor the situation in Egypt, where a dispute over import terms has disrupted tenders by the world’s biggest wheat buyer just as the market is facing record global stocks this season.
Egypt’s agriculture ministry has sent an official letter saying it will permit up to 0.05 per cent of grain fungus ergot in wheat imports, traders said on Wednesday, a move to reassure traders who have been reluctant to bid in tenders after several cargoes were rejected by Egypt’s agricultural quarantine authority.
— P.J. Huffstutter reports on the agriculture sector for Reuters from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Gus Trompiz in Paris.