U.S. grains: Soybeans slip from five-month peak; corn, wheat rally

Chicago | Reuters — U.S. soybean futures eased from a five-month high on Wednesday on profit-taking and as improved crop weather in Brazil soothed concerns about dry weather cutting production from the world’s top exporter.

Corn futures jumped one per cent to a five-month peak on short-covering support and as investors expected the U.S. Department of Agriculture to forecast a U.S. acreage decrease later this week.

Wheat rose for a fourth straight session and notched a fresh two-month high amid concerns about forecasts for another blast of potentially crop-damaging cold in the Midwest next week.

Lightly traded oats futures surged by their daily 20-cent-per-bushel limit as tight supplies and ongoing rail shipping delays in top exporter Canada spurred fund buying (all figures US$). [Related story]

Some investors were squaring their trading positions ahead of the USDA outlook conference later this week, when the agency will release its first planting estimates of the season.

“The soybean market’s had a pretty good run and with the USDA outlook conference coming up, we do have some risk. Funds are liquidating some of their positions,” said Sterling Smith, analyst at Citigroup.

Rain in Brazil eased concerns about yield losses following hot, dry weather last month.

Brazilian crushing industry association Abiove raised its soy crop forecast on Wednesday to 88.6 million tonnes, up from a 87.6-million-tonne forecast last month.

“Soybeans have lost a little of their upward momentum today with potentially improved weather in South America and some selling after the five-month high reached on Tuesday,” said Ole Hansen, head of commodity strategy at Saxo Bank.

“On the May soybean contract we are also around an important psychological level of $13.50, which has basically been providing a roof over the market for the past year. This is a natural level where we could see some selling, but overall the market remains well supported.”

Soybeans remain underpinned by the lack of Chinese cancellations of U.S. cargoes, which typically occur when new-crop South American supplies flood the market.

Chicago Board Of Trade March soybeans fell 6-3/4 cents, or 0.5 per cent, to $13.54-1/4 a bushel after touching $13.71-3/4 a bushel earlier in the session, the highest since Sept. 16. May soybeans struggled to breach chart resistance at $13.50 and fell 5-3/4 cents, or 0.4 per cent, to $13.42 a bushel.

CBOT March corn gained 4-1/4 cents, or one per cent, to $4.53-3/4 a bushel, the highest for a spot-month contract since Sept. 30. March oats closed 20 cents higher at $4.48-3/4 a bushel.

CBOT March wheat rose 8-1/4 cents, or 1.4 per cent, to $6.20-1/4 a bushel, the highest spot-contract level since Dec. 19.

Another arctic blast is expected next week in the U.S. Midwest grain belt. Milder weather this week could melt away some of the winter wheat crop’s protective snow cover before the frigid weather arrives.

— Karl Plume reports on ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Michael Hogan and Naveen Thukral.

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