Chicago | Reuters — U.S. wheat futures eased 1.2 per cent on Wednesday, setting back on a mild round of profit taking after prices posted their biggest rally since last summer on Tuesday.
Corn and soybeans ended higher after weakening overnight and early in the day session as traders moved to cover short positions amid concerns about planting delays in the U.S. Midwest.
Investment funds held massive short positions, unusual for this time of year, and many traders were concerned they would begin to start covering them if farmers’ seeding efforts were stymied by wet fields and cold soil temperatures, said Ed Duggan, senior risk management specialist at Top Third Ag Marketing.
“When you see shorts this big in the ag sector, that is flashing a warning sign,” Duggan said. “The first weather hiccup we have, that may be… when the funds decide they want to unload (those shorts).”
Corn plantings have already been delayed in southern growing areas of the United States and a massive late winter storm could slow field prep in the U.S. Midwest for the rest of the month.
“A huge storm system is sweeping through the middle section of the country today, bringing blizzards to the Plains with high winds and more flooding possible elsewhere,” Farm Futures analyst Bryce Knorr said in a note to clients.
Chicago Board of Trade May corn futures ended up 3/4 cent at $3.66-1/2 a bushel (all figures US$).
Corn futures had peaked at $3.70 a bushel during the session on rumours that China had booked shipments of U.S. corn. But the market retreated as there was no confirmation of any deals.
The drop in wheat futures also weighed on the corn market.
CBOT May soybeans settled up four cents at $9.01 a bushel.
U.S. farmers are expected to plant 91.475 million acres of corn in 2019 and 84.263 million acres of soybeans, according to an annual survey conducted by commodity brokerage and analytical firm Allendale Inc.
CBOT May soft red winter wheat was 5-3/4 cents lower at $4.47-1/4 a bushel.
Hopes of an upturn in U.S. wheat exports have been tempered by competition from other export zones such as western Europe and the Black Sea region. Black Sea wheat exporters are boosting sales to Asia with last year’s crop, a surprise move that is curbing demand for U.S. grain, traders said.
Improving prospects for this year’s harvests in the Northern Hemisphere have also weighed on wheat.
— Mark Weinraub is a Reuters commodities correspondent in Chicago; additional reporting for Reuters by Gus Trompiz in Paris and Naveen Thukral in Singapore.