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U.S. grains: Corn, soy, wheat firm in light recovery after USDA reports

Chicago | Reuters – U.S. corn and soy futures firmed on Friday in a light technical bounce one day after the U.S. Department of Agriculture released larger-than-expected yield estimates for both crops.

Wheat futures rose on short-covering, analysts said. Chicago Board of Trade December corn futures settled up 2 cents at $3.43-1/2 a bushel, January soybeans ended up 2 cents at $9.87 a bushel and December wheat rose 2-1/2 cents at $4.31-1/2 a bushel.

December corn dipped to $3.41 but stayed above the contract low set on Thursday at $3.40-3/4.

“We got a bearish report; we are watching the dust settle. So far we have not seen any follow-through to the downside. It might suggest that we are at value levels,” said Ted Seifried, chief market strategist with Zaner Ag Hedge.

Traders continued to digest Thursday’s USDA supply/demand reports in which the government raised its estimate of the U.S. corn yield to a record-high 175.4 bushels per acre, topping trade expectations.

“The USDA surprised the market,” Rabobank analysts said in a note. “Nevertheless, in the short term we view price downside for CBOT corn as limited — due mainly to the reluctance of producers to sell corn at prices much below current levels, but also due to the significant net short position held by funds.”

Soybeans steadied after falling on Thursday when the USDA surprised traders by keeping its U.S. soy yield estimate unchanged at 49.5 bushels per acre, rather than trimming it as expected.

Wheat followed the firm trend despite a lack of fresh supportive news. The CBOT December contract ended the week up 5-3/4 cents or 1.4 percent, its biggest weekly climb since mid-September.

Plentiful global wheat supplies and a large Russian harvest continue to hang over the market, capping rallies.

“We’re seeing some value-buying in both corn and wheat today, but the charts for both continue to look bearish,” INTL FCStone chief commodities economist Arlan Suderman wrote in a note to clients.

December corn ended the week down 4-3/4 cents a bushel or 1.4 percent, while January soybeans were nearly flat, rising 1/4 cent for the week.

– Additional reporting by Gus Trompiz and Naveen Thukral

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