Chicago | Reuters –– U.S. wheat futures rose 1.6 per cent on Monday, bouncing off the previous session’s contract lows on bargain-hunting and short-covering ahead of a monthly U.S. government crop report.
Soybeans and corn also climbed in largely technical buying ahead of the U.S. Department of Agriculture’s supply/demand report due on Tuesday.
At the Chicago Board of Trade, May wheat settled up 7-1/2 cents at $4.90 per bushel (all figures US$). May soybeans ended up 8-1/4 cents at $9.93-1/4 a bushel, and May corn ended up 2-3/4 cents at $3.88-3/4 a bushel.
Ample world wheat supplies hung over the market, limiting rallies. U.S. wheat has struggled to compete for export business with the dollar hovering near an 11-1/2-year high.
Nonetheless, commodity funds hold a sizable net short position in CBOT wheat, leaving the market open to bouts of short-covering.
“The USDA report is out soon and you have funds short in wheat. They don’t want to be caught short in wheat,” said Ole Houe, analyst at Sydney-based brokerage IKON Commodities.
Soybeans drew support from expectations that USDA might trim its forecast for U.S. 2014-15 soybean ending stocks from its February figure of 385 million tonnes. The average estimate among analysts surveyed by Reuters was 376 million.
Analysts were also watching for any interruptions in grain movement in Brazil after a truckers’ strike ended earlier this month, pending talks with the Brazilian government.
“Analysts… have their eye on upcoming news from South America,” Helen Pound, a vice-president at Wedbush Futures, wrote in a note to clients. “Tomorrow there will be ‘discussions’ between Brazilian government officials and truckers about the cost of diesel fuel, road tariffs, and other working conditions.”
Brazilian government supply agency CONAB will also release its production estimates for Brazilian beans and corn, Pound wrote.
Rainfall in Brazil and flooding in some of Argentina’s soy-growing areas were an underlying concern. In Brazil, rains have slowed the planting of second-crop corn.
CBOT corn drew support from firm cash values in the interior Midwest and the U.S. Gulf as corn processors and exporters tried to draw out grain sales from reluctant farmers.
— Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Gus Trompiz in Paris and Naveen Thukral in Singapore.