U.S. grains: Corn, soy rise on short-covering

A corn crop in the RM of St. Andrews in Manitoba’s Interlake region on July 5, 2018. (Greg Berg photo)

Chicago | Reuters — U.S. corn and soybean futures rose on Friday as traders covered short positions ahead of a long holiday weekend, but both commodities posted monthly declines as prospects for large U.S. harvests weighed on prices.

Wheat climbed on technical buying, along with worries about tightening global supplies.

Chicago Board of Trade December corn settled up 8-1/2 cents at $3.65 per bushel and November soybeans rose 12 cents at $8.43-1/2. December wheat finished up 10-1/2 cents at $5.45-1/2 a bushel.

U.S. financial markets including the CBOT will be closed on Monday for the Labour Day holiday.

CBOT corn rose the most on Friday on a percentage basis.

Funds were able to cover short positions after several days in which farmers sold old-crop grain as delayed-price (DP) contracts neared a deadline at month’s end, said Mark Gold, managing partner with Top Third Ag Marketing in Chicago.

“Forced farmer selling came to a crescendo yesterday and now that the DP contracts are out of the way, the market has been able to rally on fund short-covering,” Gold said.

Others said news that the Argentine government planned to announce a set of new economic measures on Monday triggered speculation that the moves might include grain export restrictions.

“I am seeing a couple rumours about Argentina reinstating some export tariffs on some of their crops,” said Jason Clapp, analyst with Risk Management Commodities.

Fresh export business lent support. The U.S. Department of Agriculture said private exporters sold 273,800 tonnes of U.S. corn and 250,000 tonnes of soybeans to unknown destinations.

Still, expectations for a massive U.S. harvest hung over the market. Commodity brokerage INTL FCStone late Thursday raised its forecast for the U.S. 2018 soybean yield to a record-high 53.8 bushels per acre, from 51.5 on Aug. 1.

The firm trimmed its corn yield estimate to 177.7 bu./ac., down from 178.1 a month ago but still a record high if realized.

Meanwhile, the Commodity Weather Group raised its U.S. corn yield estimate to 179.6 bu./ac., from 177.3 last month.

For the month of August, CBOT soybeans fell 8.2 per cent, corn fell 5.6 per cent and wheat fell 4.8 per cent.

Wheat came under pressure this month from sluggish U.S. export demand and fund-driven long liquidation. But concerns about tightening global supplies buoyed futures on Friday.

Statistics Canada estimated Canada’s 2018 all-wheat production at 28.99 million tonnes, below an average of trade expectations for 30.6 million tonnes and below USDA’s last estimate of 32.5 million.

Traders were also squaring positions ahead of a Sept. 3 routine meeting between Russia’s ag ministry and exporters that fueled speculation this week that Russia might move to limit wheat exports.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago; additional reporting by Naveen Thukral in Singapore and Sybille de La Hamaide in Paris.

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