Chicago | Reuters—Chicago Board of Trade grain and soybean futures rallied on Friday on money flow from managed funds, rising demand and weather concerns, analysts said.
The markets bounced off a lower close the previous session that followed release of bearish U.S. Department of Agriculture supply/demand data.
“We’ve seen a number of different data points suggesting the economy is going strong, which means more demand for commodities,” said Arlan Suderman, chief commodities economist at StoneX, pointing to the Consumer Price Index reading for March on Wednesday and the Producer Price Index on Thursday.
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He added there was a statistical correlation between rising inflation and funds flipping from short positions, or bets that prices will fall, to long positions.
Analysts also pointed to U.S. export sales announcements of over a half million tons of soybeans to unknown destinations this week.
“People have looked up and said ‘Oh I got another sale. How short do we really want to be?'” said Jack Scoville, vice president of The Price Futures Group.
He also cited rains keeping U.S. planting progress slow. The USDA is expected to issue an update on corn and soy planting progress in a weekly report on Monday.
Analysts predicted a National Oilseed Processors Association (NOPA) report due on Monday would show U.S. soy processors crushing more soybeans in March than any month on record. Eight analysts polled by Reuters said NOPA members, who handle about 95 per cent of all U.S.-processed soybeans, crushed an estimated 197.787 million bushels last month.
The most-active corn contract on the CBOT Cv1 rose 6-3/4 cents to close at $4.35-1/2 a bushel after falling earlier to its lowest level in more than a week. CBOT wheat Wv1 added 4-1/4 cents to $5.56 a bushel, while soybeans Sv1 were up 14-3/4 cents up at $11.74 a bushel.
—Additional reporting for Reuters by Gus Trompiz in Paris and Naveen Thukral in Singapore
