U.S. grains: Soy hits five-month high on technicals, fund buying

Chicago | Reuters — U.S. grain prices were mostly higher on Tuesday, with soybeans rising to their highest since October, on technical buying and worries that cold temperatures could damage crops in the southwestern portion of the Great Plains wheat belt.

Corn and wheat trimmed earlier gains on light selling from technical traders and from U.S. farmers, who were taking advantage of recent high prices to sell portions of last year’s harvests, traders said.

“The gains are nice to see but they could be limited for the time being,” Zaner Group analyst Ted Seifried said. “We still have very large carryovers.”

The U.S. Department of Agriculture on March 31 will release annual U.S. acreage forecasts and quarterly grain stocks. The reports could inject volatility into markets that have traded in relatively narrow ranges amid record-large global grain stocks.

Investors were extending long bets on soybean prices ahead of the reports, and open interest in soybeans climbed to about 730,000 contracts, the most in a month, according to CME Group data. The strongest Brazilian real since August also made U.S. soybeans more competitive in global markets even as Brazil’s harvest of a record-large crop advanced.

CBOT May soybeans settled up 8-1/4 cents at $9.10-1/4 per bushel (all figures US$), rising above their key 200-day moving average for the first time since August. On a continuous chart, soybeans rose to their highest since Oct. 15.

Corn for May delivery was up 1/2 cent at $3.70 after failing to surpass its 100-day moving average.

Benchmark CBOT May wheat was up 1/4 cent at $4.66-3/4 and K.C. hard red winter wheat for May delivery was up two cents to $4.76-3/4.

Wheat prices were underpinned by freezing temperatures over the weekend in the Plains growing region, where developing plants likely were damaged, potentially reducing yields at the summer harvest. The scale of the damage likely will be unknown for weeks.

Colder-than-normal weather was predicted during the next 11 to 15 days in the southern Plains, according to the Commodity Weather Group. The U.S. Department of Agriculture late on Monday said wheat crop conditions improved in top growing state Kansas and declined in Oklahoma and Texas.

“There are concerns over cold weather; the hard red winter wheat crop could have suffered some damage over the weekend,” said Kaname Gokon at the Okato Shoji brokerage in Tokyo.

“But export business for U.S. wheat is slow, prices are unlikely to rally much.”

Michael Hirtzer reports on agriculture and ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Gus Trompiz in Paris.

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