U.S. grains: Corn firms on short-covering

U.S. corn planting just getting started; traders adjust positions ahead of USDA reports

corn
(Dave Clark photo courtesy ARS/USDA)

Chicago | Reuters — U.S. corn futures climbed about two per cent on Monday on short-covering ahead of the Midwest planting season and chart-based buying, analysts said.

Wheat futures were also higher on short-covering while soybeans closed almost flat, retreating from early advances.

Chicago Board of Trade May corn settled up 7-1/2 cents at $3.67 per bushel (all figures US$). May wheat rose 4-3/4 cents to $4.28-3/4 a bushel while May soybeans ended down 1/4 cent at $9.41-3/4 a bushel.

Corn advanced after weekly data released on Friday from the U.S. Commodity Futures Trading Commission showed big speculators maintaining a large net short position, which is unusual at a time of year when adverse weather can stall Midwest fieldwork.

The supplement to the CFTC’s weekly commitments report showed non-commercial traders trimmed their net short position to 138,510 contracts in the week to April 4. But the figure was still the second-largest net short since October, which leaves the market vulnerable to short-covering bounces.

The CFTC data showed that commodity index funds, which typically buy and hold commodities, had the smallest net long in corn since 2009.

“We could be laying the groundwork and foundation for a gradual move up in corn for the rest of this growing season, and possibly into 2018,” said Ag Watch Market Advisors president Dewey Strickler.

Planting is barely under way in the U.S. After the market closed, the U.S. Department of Agriculture said the corn crop was three per cent planted, behind an average of trade estimates for four per cent but in line with the five-year average.

CBOT soybeans closed narrowly mixed, with the spot May contract fractionally lower as traders squared positions ahead of U.S. and Brazilian government forecasts due on Tuesday.

Analysts surveyed by Reuters expect USDA in its monthly supply/demand report to raise its estimates of South American corn and soybean crops.

“Operators are staying careful… before the USDA report,” consultancy Agritel said in a note. “Corn and soybean production on the South American continent will surely be revised up from last month’s report.”

Argentina’s 2016-17 soybean harvest accelerated in the past week but concerns over heavy weekend rains lifted futures in early moves.

— 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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