Chicago | Reuters –– Front-month U.S. corn futures rose three per cent on Wednesday, their biggest single-day advance since September, on short-covering and concerns about planting prospects in the Midwest, analysts said.
Concerns about South American weather lent support.
Soybean futures also charged higher, buoyed by chart-based buying and data showing strong demand from China, while wheat followed the firm trend.
At the Chicago Board of Trade, May corn settled up 10-3/4 cents at $3.73-1/2 per bushel after reaching $3.74-3/4, the highest spot price since December (all figures US$).
CBOT May soybeans finished up 19-1/2 cents at $9.55-3/4 a bushel and May wheat ended up nine cents at $4.61-1/2 a bushel.
Corn’s move was the largest by percentage. Commodity funds hold a hefty net short position in CBOT corn, leaving the market vulnerable to short-covering at a time when the U.S. planting season is just getting started.
“Corn buying is merely positioning for potential weather problems in the months ahead,” Arlan Suderman, chief commodities economist with INTL FCStone, said in a note to clients.
The U.S. Department of Agriculture has projected that U.S. farmers will expand corn plantings in 2016 by six per cent, to 93.6 million acres. But with new-crop November soybean futures topping $9.60 a bushel, up nearly $1 from early March, some analysts think corn acres might fall short of the USDA’s forecast as farmers switch some fields to soybeans.
Meanwhile, in Brazil, dry weather is stressing the country’s winter corn crop.
Soybean futures rose for a fourth straight session, gaining technical momentum as the May contract set an eight-month high and pushed through chart resistance at $9.50 a bushel.
Fresh data from China lent support. China, the world’s biggest soy buyer, imported 6.1 million tonnes of the oilseed in March, up 35.3 per cent from February and up 36 per cent from a year earlier, customs figures showed.
The figures eased market concerns that reduced economic growth in China could cut the country’s massive soybean purchases.
Also bullish, heavy rain has damaged Argentina’s soybean harvest and may persist into next week.
“There is also support for soybeans from concern about rainfall in Argentina disrupting and possibly damaging the soybean harvest there,” said Frank Rijkers, agrifood economist at ABN AMRO Bank.
Wheat futures advanced despite forecasts calling for much-needed rains later this week in portions of the southern U.S. Plains.
— Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago.
Additional reporting for Reuters by Michael Hogan in Hamburg and Naveen Thukral in Singapore.