Chicago | Reuters –– U.S. wheat, corn and soybean futures rose on Wednesday, rallying on bargain hunting after all three key commodities fell to multimonth or multiyear lows a day earlier, traders said.
But expectations of bumper U.S. crops limited further gains.
At the Chicago Board of Trade, September wheat settled up nine cents at $4.10-1/4 per bushel (all figures US$). Benchmark December corn ended up one cent at $3.35 a bushel and November soybeans settled up 2-1/2 cents at $9.55-1/2 a bushel.
Wheat posted the biggest advance despite a bearish backdrop of record-large global wheat supplies. The spot contract dipped below $4 a bushel on Tuesday for the first time in a decade, but quickly climbed back above that mark, a supportive technical signal.
“I think it’s just short-covering… Trying to track spec fund shorts after yesterday, it’s probably the biggest net short we have seen to date,” said Tom Fritz, partner with EFG Group in Chicago.
The supplement to the U.S. Commodity Futures Trading Commission’s latest weekly commitments report showed non-commercials held a net short position in CBOT wheat of more than 142,000 contracts in the week to July 26, the third-largest on record.
Traders estimated that funds expanded their net short in the days since, leaving the wheat market vulnerable to a short-covering rally.
CBOT corn and soybeans also rebounded after plunges on Tuesday that were tied to an improving outlook for crops in the Midwest. Spot corn futures bounced from a near two-year low on Tuesday while soybeans hit their lowest levels since mid-April.
“I think today’s price strength is a bargain-hunting spike rather than any fundamental change in the overall outlook,” said Frank Rijkers, agrifood economist at ABN AMRO Bank.
“Bearish factors look to be dominant in the near future with U.S. crop weather remaining positive and expectations of good U.S. harvests remain,” Rijkers said.
Corn also drew support from news the Brazilian government is working to adjust its regulations on imports of genetically modified organisms (GMOs) to allow more corn imports from the U.S.
— Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Michael Hogan and Colin Packham.