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U.S. grains: Soy surges on short-covering on way to huge monthly loss

Chicago / Reuters – U.S. soybeans surged as much as 2.8 per cent on Friday, reversing earlier losses in a rally sparked by U.S. data showing improved export demand, traders and analysts said.

Corn futures were narrowly higher and wheat mostly lower.

All three commodities notched steep monthly losses on the final trading day of July and wheat futures fell to the lowest levels in about a decade before trimming declines.

The most-active CBOT November soybeans rose 25 cents to $10.03 per bushel, gaining the most since July 12.

Soy prices rallied to their session peaks after the U.S. Department of Agriculture reported that exporters sold 129,000 tonnes of U.S. soybeans to unknown destinations, the third sale of at least 100,000 tonnes in as many days.

Mike Zuzolo, analyst at Global Commodity Analytics, said buyers were taking advantage of the lowest soybean prices in about three months.

“The demand on the old (soy) crop has reinvigorated the bull spread,” Zuzolo said, adding that weather outlooks were mostly favorable for U.S. soy fields that face their key pod filling periods in August.

Short-covering in August soybeans on the first notice day for deliveries against the contract further buoyed prices, traders said.

However, soy prices still slid 13 per cent for the month, for their largest monthly decline since June 2014.

CBOT wheat on a continuous chart fell to $4.03-1/2 per bushel, the lowest since September 2006. CBOT September wheat pared losses, settling down 2-1/2 cents at $4.07-3/4 per bushel on burdensome global supplies and limited demand for U.S. wheat. Wheat eased for the third straight month, dropping eight per cent in July.

Unapproved genetically modified (GMO) wheat plants were found growing in Washington state, according to government officials, and the news contributed to pressure on cash prices in the U.S. Pacific Northwest but had only minimal impact on futures.

CBOT December corn finished up 4 cents at $3.42-3/4 per bushel, in light short-covering. Corn eased about 7.8 per cent for the month.

Gains in corn came as the dollar fell to a 3-1/2-week low against a basket of currencies. A lower dollar can make U.S. goods more competitive in global markets.

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