U.S. grains: Wheat climbs on acreage view, short-covering

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters — U.S. wheat futures rose about 1.5 per cent on Thursday as expectations for a drop in U.S. wheat plantings for 2017 and strong weekly export sales prompted short-covering, traders said.

Corn and soybeans closed modestly higher on technical buying and strong weekly export sales.

Chicago Board of Trade December wheat settled up six cents at $4.03 per bushel (all figures US$). December corn settled up 3-1/2 cents at $3.42 a bushel and January soybeans ended up 3-3/4 cents at $9.89-1/2 a bushel.

Wheat firmed after private analytics firm Informa Economics lowered its estimate of U.S. winter wheat plantings for harvest in 2017 to 33.761 million acres from 35.421 million, trade sources said.

Informa projected U.S. all-wheat plantings for 2017 at 47.265 million acres, they said, which if realized would be the fewest in U.S. Department of Agriculture records dating to 1919.

“Wheat held steady early in the session on a bit of inter-market spreading, then took the Informa acreage numbers and rallied smartly late in the session,” ED+F Man Capital analyst Charlie Sernatinger wrote in a note to clients.

Commodity funds hold a large net short position in CBOT wheat, leaving the market vulnerable to bouts of short-covering.

Also, USDA reported export sales of U.S. wheat in the week to Nov. 10 at 598,400 tonnes, at the high end of trade expectations for 400,000 to 600,000 tonnes.

Corn firmed on strong export demand in spite of a surge in the dollar, which tends to make U.S. grains less attractive to those holding other currencies.

USDA reported export sales of U.S. corn in the week to Nov. 10 at 1,661,000 tonnes, topping a range of trade expectations for 900,000 to 1.2 million tonnes.

In addition, USDA said private exporters in the last day sold 106,200 tonnes of corn to unknown destinations for delivery in 2016-17.

“The fact we are still getting sales done, with the dollar trading where it is, is encouraging,” said Ted Seifried, chief market strategist for Zaner Ag Hedge.

The dollar index hit a multi-year high after Federal Reserve Chair Janet Yellen said the U.S. central bank could raise interest rates “relatively soon.”

Soybeans closed modestly higher following the firm trend in grains. Both corn and soybeans drew support from ideas that farmer selling of both crops is slowing as the U.S. harvest winds down.

“Most producers that I am talking to have sold what they are going to sell, and are locking the bins up tight, at least until the next tax year,” Seifried said.

— Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Gus Trompiz in Paris.

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