Chicago | Reuters – Chicago soybean futures turned higher on Wednesday on technical buying and continued hopes of stronger Chinese demand, analysts said, with the benchmark contract heading back toward a two-month peak set last week.
Wheat rose on what appeared to be fund-driven short-covering, while corn futures sagged in choppy trade.
Chicago Board of Trade March soybean futures closed up 1-1/2 cents at $11.24 per bushel after reaching $11.28-1/4, the contract’s highest since February 6.
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CBOT March wheat gained nine cents to close at $5.37-1/4 a bushel while March corn settled down 1-1/4 cent at $4.27-1/2 a bushel.
Soybeans rallied as traders gauged the likelihood of top global soy buyer China booking more U.S. soybeans.
U.S. President Donald Trump said last week that China had increased its target for U.S. soybean purchases, and the U.S. Department of Agriculture in a monthly world crop report on Tuesday said, “China is reported to be considering buying more U.S. soybeans.”
Brazil, the world’s biggest soy producer and exporter, has begun harvesting a record-large soybean crop that is expected to dominate the global export market in the coming months. But the prospect of China buying additional U.S. soy cargoes under a trade truce has buoyed the futures market.
“The big unknown with China continues to be the big factor. We are finding that futures are just not able to set back very much in this environment,” said Terry Linn, analyst with Linn & Associates in Chicago.
Wheat climbed despite a lack of news. Commodity funds hold a hefty net short position in CBOT wheat futures, leaving the market vulnerable to bouts of short-covering.
Corn futures drifted lower, losing to soybeans and wheat on inter-market spreads. The market shrugged off confirmation from the USDA of private sales of 230,560 metric tons of U.S. corn to unknown destinations.
-Additional reporting by Daphne Zhang and Lewis Jackson in Beijing, and Gus Trompiz in Paris
