U.S. corn futures gained 1.3 per cent on Thursday on a better-than-expected export report from the U.S. government, as well as short-covering following recent declines, traders said.
“We have been down pretty hard and we are at the bottom of the trading range,” said Bill Gentry, a broker at Risk Management Commodities. “This is just a little bit of a recovery. I do not see much more than that.”
Soybean futures also rose, supported by the gains in corn and technical buying after dipping early in the trading session due to concerns about exports.
“Despite the disappointing (soybean) export sales, the traders are finding (there are) a little bit of buy stops,” said Terry Reilly, senior commodity analyst at Futures International.
Wheat futures closed lower, hitting a fresh 18-month low in their sixth straight day of declines, as traders locked in profits from early-session gains. The Argentine government’s boost to its crop outlook also weighed on the wheat market.
The benchmark Chicago Board of Trade March soft red winter wheat contract dropped two cents to $6.10-3/4 a bushel (all figures US$). On a continuous basis, front-month CBOT wheat hit its lowest level since June 15, 2012, during Thursday’s trading session.
CBOT March wheat, KCBT March hard red winter wheat and MGEX March spring wheat all hit new contract lows.
“U.S. and global crop production prospects continue with an optimistic slant, not just for 2013, but 2014 and beyond,” Matt Zeller, director of marketing information at INTL FCStone, said in a note to clients.
Argentina’s agriculture ministry raised its outlook for the 2013-14 wheat crop by 500,000 tonnes, to nine million tonnes.
CBOT March corn ended up 5-1/2 cents at $4.30-1/2 a bushel and CBOT January soybeans were three cents higher at $13.27 a bushel.
Soybeans found support after briefly dipping below their 30-day moving average, a level the January contract had not fallen below since Nov. 21.
The U.S. Agriculture Department said on Thursday morning that export sales of corn for the 2013-14 marketing year were 827,100 tonnes in the latest reporting week, topping forecasts for 550,000 to 750,000 tonnes.
Wheat export sales of 656,100 tonnes also topped the range of expectations, while soybean export sales of 415,500 tonnes fell below the low end of analysts’ estimates for 700,000 to 900,000 tonnes. Soymeal export sales were a marketing year low of 77,100 tonnes, below expectations for 150,000 to 300,000 tonnes.
A broad rise in the dollar after the U.S. Federal Reserve’s decision on Wednesday to trim its aggressive bond-buying program curbed buying as it made U.S.-priced commodities more expensive internationally.
— Mark Weinraub is a Reuters correspondent covering grain futures markets from Chicago.