Glacier FarmMedia COVID-19 & the Farm

U.S. grains: Corn, wheat rally from three-month lows on short-covering

Late-session fund rolling lifts deferred-month soybeans

Chicago | Reuters — U.S. corn futures jumped more than two per cent on Friday in the strongest gains in a month on technical buying and short-covering after sinking to a three-month low the previous day.

Hard red winter wheat futures surged three per cent on concerns about adverse weather in some key production areas, including Russia’s Volga Valley and the southern U.S. Plains. The rally helped to lift soft red winter wheat from three-month lows.

Spot soybean futures fell while deferred months advanced as commodity index funds rolled their positions late in the session.

“We’ve taken significant value out of both corn and wheat,” said Jefferies Bache analyst Shawn McCambridge. “This week the interest in continuing to push this market down was starting to wane.”

Corn fell in each of the previous six sessions as benign conditions for recently planted maize have raised expectations for a record harvest this year.

Wheat has also been pressured as the Northern Hemisphere’s harvest neared and as U.S. supplies struggled to compete on the global market with cheaper grain from other origins.

Some traders said the recent pullback in wheat had been overdone in view of crop risks in the southern U.S. and Russia.

Low yields in the drought-stressed HRW wheat belt had been expected, but rains this week raised concerns about quality damage to the maturing crop. Meanwhile, hot and dry conditions stressed crops in Russia’s Volga Valley.

Chicago Board of Trade July corn rose 10 cents, or 2.2 per cent, to $4.59 a bushel (all figures US$). It earlier slipped to $4.47, the lowest front-month price since Feb. 27, but climbed back above the key technical support level of $4.50. But corn fell 1.4 per cent in the week, its fourth straight weekly decline.

CBOT July SRW wheat added 12-1/2 cents , or 2.1 per cent, to $6.18-1/4 a bushel after earlier sinking to $6.03, its lowest since Feb. 28. Still, the contract fell for a fourth straight week, shedding 1.4 per cent.

July HRW wheat gained 21-1/2 cents to $7.35-1/2 a bushel, a three per cent gain that was the steepest since April 15. The contract’s 1.7 per cent weekly rise was the first in a month.

CBOT July soybeans fell 3-1/2 cents to a 2-1/2 week low of $14.57 a bushel, 2.4 percent below a week ago and the steepest weekly drop in nearly three months. New-crop November soybeans gained 8-1/4 cents to $12.18-3/4 per bushel.

Commodity fund rolling riled soybean prices late in the session after futures held near previous levels for much of the day. Deutsche Bank was in the fourth day of its five-day commodity index fund roll, and the S+P GSCI fund began its five-day roll on Friday.

Traders’ attention was also turning to next week’s U.S. Department of Agriculture monthly crop production and supply and demand reports, scheduled for release on Wednesday.

— Karl Plume reports on ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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