Chicago/Reuters – Wheat prices rose about 1.4 per cent on Tuesday, rebounding in largely technical trade on ideas that a sell-off of nearly 3 per cent a day earlier was overdone, traders said.
Corn and soybeans were also higher, supported by firm U.S.cash markets.
At the Chicago Board of Trade as of 12:54 p.m. CST (1854 GMT), December wheat was up 7 cents at $5.15 per bushel.
December corn was up 3 cents at $3.79-1/2 a bushel and most-active January soybeans were up 4 cents at5 $8.82-3/4 a bushel.
A spate of global wheat purchases by buyers in the Middle East and Africa in the last week lent some background support to the market.
Most recently, Ethiopia purchased about 800,000 tonnes of milling wheat that could include Black Sea and Baltic Sea regions, European traders said. The African state could book more volume as part of a tender for up to 1 million tonnes, they said.
Algeria and Egypt also made recent purchases. But U.S. wheat remains too high-priced to compete in those parts of the globe. Nonetheless, CBOT wheat turned higher after the December contract held above support at its 20-day moving average near $5.05 in early moves, a bullish chart signal.
“The market was beaten down too hard yesterday,” said Terry Reilly at Futures International.
As well, a 4 per cent jump in U.S. crude oil futures appeared to help buoy the grains complex.
CBOT corn rose on firm U.S. cash markets as producers in the Midwest have nearly finished the harvest and stored much of their grain, content to hold out for higher prices.
“The farmer has tucked supplies away from the market. So we are trying to coax them (back) by narrowing the basis and spreads,” said Don Roose, president of Iowa-based U.S. Commodities.
The U.S. Department of Agriculture said the U.S. corn harvest was 85 per cent complete and the soybean harvest 92 per cent complete, both ahead of the respective five-year averages.
CBOT corn and soy futures pared gains after private firm Informa Economics raised its estimates of the U.S. 2015 corn and soybean crops. The firm pegged corn production at 13.718 billion bushels, above the USDA’s current estimate of 13.555 billion.
Informa estimated soybean production at 3.952 billion bushels, a potential record high that topped the USDA’s forecast of 3.888 billion. The USDA is scheduled to release updated crop estimates on Nov. 10.
“Big crops get bigger. You have to be afraid that with this (upcoming USDA) report, the crop grows,” Roose said.
Additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.