Chicago | Reuters — U.S. wheat futures rebounded on Wednesday to notch a 1-1/2-week high on worries about frigid weather across the Wheat Belt that threatens to damage crops lacking protective snow cover.
Corn also rose on spillover support from wheat and as traders covered short positions following recent contract lows.
Soybeans fell to three-month lows as rain in parts of Brazil and Argentina was seen favouring crops there.
Traders continued to square positions ahead of the year-end holidays and in anticipation of the rebalancing of portfolios by commodity funds early in the new year.
“Short-covering is lifting the wheat market. It got off to a poor start, but renewed concerns about the cold spell across the U.S. with a lack of snowfall coverage is bringing some of the longs back into the market,” said Terry Reilly, senior commodities analyst with Futures International.
Temperatures in hard wheat growing areas are expected to be below normal next week, forecasters said. Sub-zero lows measured in Fahrenheit are not forecast to be as widespread as thought earlier this week, but temperatures in some areas may still be frigid enough to damage crops, they said.
Chicago Board of Trade (CBOT) March soft red winter wheat were up four cents at $4.23-1/2 a bushel after earlier peaking at $4.24-1/2, the highest since Dec. 8 (all figures US$). K.C. March hard red winter wheat was up 2-1/2 cents at $4.22-1/2 a bushel.
CBOT March corn was up 1-3/4 cents at $3.49-1/4 a bushel.
A weekly U.S. Energy Information Administration report confirmed continued strong use of corn by ethanol makers. The current production pace suggests that corn use by the ethanol industry may be above the latest U.S. Agriculture Department annual usage forecast, analysts said.
January soybeans fell two cents to $9.54 a bushel after earlier falling to $9.52-3/4, the lowest since Sept. 12.
Brazil and Argentina are on track for another year of bumper soybean production as rains ease concerns over dry weather brought by the La Nina weather phenomenon.
Rains that fell on Argentina’s main farm belt over the weekend brought relief to parched soybean and corn-growing lands, meteorologists said on Monday, allowing the planting of crops to resume in most of the affected areas.
Central Brazil is expected to receive extensive rains over the next 10 days, while northern areas could get rain in the 11- to 15-day period, meteorologists Commodity Weather Group said in a note to clients.
— Karl Plume reports on agriculture and agribusiness for Reuters from Chicago; additional reporting by Sybille de La Hamaide in Paris and Naveen Thukral in Singapore.