U.S. grains: Wheat, corn weak as traders await USDA report

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters –– Chicago Board of Trade soybean futures firmed on Tuesday, recovering from weakness in overnight trading on technical buying amid lingering concerns about weather in key South American growing regions.

Corn eased as traders staked out positions ahead of the release of key U.S. Agriculture Department supply and demand reports on Thursday. Wheat futures closed mostly lower, but the front-month MGEX spring wheat contract rose to a 1-1/2 year high.

Moves in all three commodities were muted as traders were reluctant to make big bets ahead of the reports.

“I call this noise,” said Ag Watch Market Advisors president Dewey Strickler. “It is an evening of positions going into the report.”

Traders said the weather in Brazil and Argentina remained at the forefront of the market, particularly after crop shortfalls from both major exporters in 2016.

“While the weather looks a little better, we need drier weather in parts of Argentina, and we need more rain in parts of Brazil,” said Greg Grow, director of agribusiness for Archer Financial Services in Chicago. “Everybody remembers what happened last year.”

CBOT March soybean futures settled up 8-1/2 cents at $10.13-3/4 a bushel (all figures US$). Some technical buying helped push the market higher after prices fell below the 100-day moving average of $10.00-1/8.

CBOT March soft red winter wheat ended down a 1/2 cent at $4.26-3/4 a bushel, and CBOT March corn was 1-3/4 cents lower at $3.58-1/4 a bushel.

MGEX spring wheat peaked at $5.62 a bushel, its highest since July 21, 2015, before closing 3/4 cent below the session peak.

Improving weather forecasts for winter wheat development around the globe added pressure to the grains.

“Plains wheat to see showers across dry area this weekend,” forecaster Commodity Weather Group said in a note to clients. “Despite colder than normal conditions next 10 days, winterkill threats in Europe/FSU wheat minimal.”

But expectations that the USDA reports will show a sharp cutback in U.S. winter wheat seedings kept the declines in check.

— Mark Weinraub 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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