U.S. grains: Soy rebounds as spotlight turns to U.S. planting

Chicago | Reuters — U.S. soybean futures hit a near two-week high on Thursday on bargain buying after the front contract this week fell to its lowest level in a year, and as traders shifted their attention to U.S. planting prospects.

Corn also rose as investors covered short positions ahead of a long holiday weekend, while wheat fell on forecasts for more beneficial rains in the southern Plains.

Chicago Board of Trade May soybean futures settled up 7-3/4 cents at $9.55-1/2 per bushel (all figures US$). May corn ended up two cents at $3.71 a bushel and May wheat fell 3-1/2 cents to $4.29-3/4 a bushel.

CBOT grain markets will be closed on Friday, with trade resuming Sunday at 7 p.m. CT.

Soybeans rose for a second straight session and closed higher for the week, halting a five-week slump tied to rising estimates for huge South American crops.

CBOT spot soybeans notched a one-year low Tuesday at $9.29-3/4, after the U.S. Department of Agriculture in a monthly report raised its projections of the Brazilian and Argentine soy harvests. Those figures followed a March 31 USDA report projecting a jump in U.S. soybean plantings to record levels this year.

Some analysts believe the soybean market has fully digested those factors and is due for a rebound, especially given uncertain U.S. crop weather.

“We have gotten through the (USDA) reports and thrown all the bad news we can at it, and now it’s short-covering and a seasonal bounce as we get into our planting season,” said Ted Seifried, chief market strategist with the Zaner Group in Chicago.

Within the CBOT soy complex, soymeal futures rose the most on a percentage basis, buoyed by commercial buying after the May soymeal contract fell to a six-month low this week, traders said.

CBOT soymeal drew additional support from allied soymeal futures on China’s Dalian Commodity Exchange, which climbed for a fourth straight session.

CBOT corn futures advanced on short-covering ahead of a three-day U.S. holiday weekend and on worries about a slow start to planting in the Midwest. The corn crop was three per cent seeded as of April 9, USDA said this week.

Rain showers forecast across the western half of the U.S. Corn Belt next week are likely to stall fieldwork.

“The market is, perhaps a little prematurely, starting to worry about rainy conditions in the U.S. Midwest over the next fortnight or so,” said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.

Rainfall was expected to benefit U.S. wheat, however, which had endured dry conditions during winter.

— Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Gus Trompiz in Paris.

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