Chicago|Reuters — U.S. soybean, corn and wheat futures firmed on Monday, bouncing off multiyear lows due to a mild round of bargain buying and short covering, traders said.
But forecasts for excellent growing weather across broad stretches of the Midwest during the next two weeks limited gains as little stress is expected on both corn and soybeans, bolstering expectations of a bumper harvest.
“The weather continues to be excellent for crop development,” Sterling Smith, futures specialist at Citigroup, said in a note to clients. “Short covering does not look to be much of a threat at the moment, and the U.S. farmer is a little behind the curve on getting items sold, so any rallies will likely find swift resistance.”
Chicago Board of Trade September corn futures settled 3-3/4 cents higher at $3.81-1/2 a bushel, snapping a nine-session losing streak. Corn futures hit fresh contract lows during the overnight trading session before finding some technical support.
“Like the rest of the floor, the corn rallied a bit on short covering as the charts turned up from being severely oversold,” Charlie Sernatinger, analyst with ED&F Man Capital, said in a note to clients.
CBOT August soybean futures were up 1-1/4 cents at $11.97 a bushel and CBOT soft red winter wheat for September delivery was 11-3/4 cents higher at $5.37-3/4 a bushel.
Wheat hit its lowest level in four years and soybeans their lowest in 2-1/2 years on Friday following a bearish U.S. government report that forecast plentiful supplies of both grains and oilseeds.
A U.S. Department of Agriculture report on Monday afternoon was expected to show that the condition of the U.S. soybean crop held steady at a 20-year high during the past week, with corn ratings likely to equal their best in 14 years, according to a Reuters poll.
“There are some pretty big numbers being projected. We are looking at big yields for corn and soybeans in the U.S.,” said Paul Deane, senior agricultural economist at ANZ Bank in Melbourne.
Mark Weinraub is a reporter for Reuters in Chicago