U.S. grains: Wheat, corn rise on short-covering bump

(Stephen Ausmus photo courtesy ARS/USDA)

Chicago | Reuters — U.S. wheat futures rose on Monday, with the benchmark Chicago Board of Trade soft red winter wheat contract gaining 1.8 per cent, on a round of short-covering by investment funds as well as technical buying, traders said.

“If you are looking for a fundamental reason for today’s price rally, look elsewhere, as it appears the action was all structural,” Charlie Sernatinger, global head of grain futures for ED+F Man Capital said in a note to clients.

Short-covering also lent support to corn contracts, which had fallen for four days in a row. Soybean futures firmed on bargain buying after three straight days of declines to close out last week’s trading left prices near their lowest in 6-1/2 years.

“Beans have started the week off with a little bounce,” brokerage INTL FCStone said in a note to clients. “Feels dead-catish, but could be some Chinese demand showing up on the lows.”

The benchmark Chicago Board of Trade December soft red winter wheat contract gained 1.9 per cent. Traders noted that the investment funds began covering shorts after prices held support at Friday’s lows.

CBOT December wheat settled up 10 cents at $4.96-3/4 a bushel. K.C. hard red winter wheat December futures, which track the crop grown in the U.S. Plains, gained 8-1/4 cents to $4.90-1/2 a bushel.

CBOT December corn ended up 7-1/4 cents at $3.84-1/2 a bushel while CBOT November soybeans were seven cents higher at $8.74-1/4 a bushel.

The U.S. Agriculture Department said on Monday morning that export inspections of soybeans totalled a bigger-than-expected 502,846 tonnes in the latest week. Wheat export inspections of 604,918 tonnes also topped analysts’ estimates.

USDA also said that corn export inspections came in at 735,535 tonnes, within the range of analysts forecasts for 700,000 to 850,000 tonnes.

Forecasts for good weather, which will shepherd both crops through their final stages of development, across the U.S. Midwest during the next week kept the corn and soybean gains in check.

The soybean harvest is already under way in the mid-South and a few parts of the Midwest, including in the top producing states of Illinois and Iowa. Reports of good yields also limited buying on Monday.

Mark Weinraub is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Sybille de La Hamaide in Paris.

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