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U.S. grains: Corn, soy gain as market wrestles with export, crop prospects

Wheat also higher; acreage uncertainty still hangs over market

CBOT september corn
CBOT September 2019 corn futures with 20-, 50- and 100-day moving averages. (Barchart)

Chicago | Reuters — Chicago corn and soybean futures settled up on Friday as investors weighed trade talks between the United States and China and expected cooler U.S. weather against uncertainty over acreage levels following a rain-soaked spring.

Some analysts said there may be some technical buying pushing up futures, especially soybeans. They also looked to expected cooler temperatures early next week as a heat wave descended on much of the Midwest.

Traders pondered whether a call on Thursday between senior U.S. and Chinese officials would herald progress in ending a trade dispute that has stalled U.S. soybean exports.

“I think some short-covering might be going on,” said Brian Basting, analyst with Advance Trading. “The forecast gets extremely important for soybeans at the end of July.”

Investor sentiment also was buoyed by growing expectations that the U.S. central bank will cut interest rates later this month.

Chicago Board Of Trade September corn futures settled up 6-1/4 cents, or 1.7 per cent, at $4.30-3/4 a bushel, after holding above Thursday’s two-week low of $4.28 (all figures US$).

August CBOT soybean futures settled up 20-1/4 cents, or 2.3 per cent, at $9.01-1/2 a bushel. Soft red winter wheat also settled up nine cents, or two per cent, to $5.02-1/2 a bushel on bargain-buying after falling steeply this week due to the previous weakness in corn and supply pressure from U.S. and European wheat harvests.

Last week, grain markets were underpinned by fears that U.S. corn and soybeans, already weakened by soggy planting conditions, could suffer from prolonged hot and dry weather.

But rain this week in the Midwest and forecasts for heat to ease next week created selling pressure this week.

“Normally we can expect some stability after the Fourth of July,” said Joe Vaclavik, president of Standard Grain. “But the hot and dry weather isn’t as good of a sign as it normally is.”

Investors are already looking ahead to a U.S. Department of Agriculture crop report on Aug. 12, which is expected to include updated planting estimates, for a clearer indication of harvest prospects.

“That’s the next big data point,” said Vaclavik. “We’ll be able to get a slightly more accurate yield reading at that point.”

Reporting for Reuters by Barbara Smith in Chicago; additional Reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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