U.S. grains: Corn hits one-month high ahead of USDA data

Reuters –– Chicago corn futures hit a one-month high on Thursday as speculators covered short positions while falling energy prices undercut a rally in oilseeds, traders and analysts said.

The markets are waiting for the U.S. Department of Agriculture to issue quarterly grain stocks data on Friday.

The most-active corn contract on the Chicago Board of Trade (CBOT) rose just over one per cent to settle at $4.88-1/2 a bushel, its highest close since Aug. 28 (all figures US$). Corn futures have climbed 4.4 per cent since Sept. 19, when they hit their lowest levels in three years.

“Why has the market been trying to grind higher the last number of days? I just think it’s short-covering,” said Tom Fritz, a partner with brokerage EFG Group in Chicago.

Fritz pointed to data from the U.S. Commodity Futures Trading Commission last week which showed speculative investors held a massive net short position in corn. He said they were likely being lured into buying back previously sold positions as corn hovered near three-year lows.

Fritz added that some of the short-covering was likely being fueled by traders repositioning ahead of the release on Friday of USDA’s closely watched stocks report.

CBOT soybeans fell 2-3/4 cents $13.00-1/2 a bushel after four sessions of gains. As crude oil fell, soybeans followed, led by soybean oil.

“Soybeans are not finding the support from the energy that they found yesterday through that bean oil market,” said Mike Zuzolo, president of Global Commodity Analytics in Atchison, Kansas.

December soybean oil fell almost 2.3 per cent to settle at 56.91 cents/lb. The contract hit its lowest price since June 30.

CBOT wheat traded sideways most of the session to settle down 3/4 cent at $5.78-3/4 a bushel, finding some strength from data showing better-than-expected weekly U.S. export sales but pressured by heavy global supplies.

K.C. hard red winter wheat hit two-year lows, falling 9-1/2 cents to $6.85 a bushel. MGEX December spring wheat hit a contract low of $7.45 and settled down 3-3/4 cents at $7.47.

— Zachary Goelman is a Reuters multimedia reporter in New York City.