Chicago/Reuters – Chicago wheat futures ticked up on Wednesday on technical buying, despite rain forecasts across U.S. grain belts adding to worries about weather woes overseas.
Corn futures ended the day slightly lower after private forecasters raised their estimates for U.S. production, while soybeans rose on bargain-buying and robust U.S. exports.
Chicago Board of Trade December wheat closed up 1.7 per cent to $5.26-1/4 a bushel, with buying accelerating as the contract rose above its 100- and 200-day moving averages. January soybeans closed up 0.7 per cent to $8.84 a bushel, while December corn eased down 0.1 per cent to $3.80-1/2 a bushel.
Some traders warned movement in corn and soybean futures markets could be somewhat stilted until the U.S. Department of Agriculture releases its monthly supply and demand report on Nov. 10 at noon EST (1500 GMT).
“Range-bound trade is inherently boring, and there is nothing today which suggests we’ll be leaving those ranges soon,” Tregg Cronin, a market analyst at Halo Commodity Company LLC wrote in an analyst note.
Corn and soybean prices earlier in the day felt Wednesday’s slump in live cattle futures. Beef packer margins soured as ham and turkey began to compete with beef ahead of the Thanksgiving holiday, traders and analysts said.
Corn gains earlier in the day, too, were restricted by private forecasts of the U.S. crop, which predicted near-historic yields. On Monday, commodity brokerage INTL FCStone raised its forecast to 13.543 billion bushels, up slightly from the prior month.
Private analytics firm Informa Economics on Tuesday projected corn output 13.718 billion bushels, up from its prior 13.561 billion-bushel estimate. Its yield forecast of 170.1 bushels per acre would be the second-highest ever.
Some analysts think the corn yields could be even higher.
“I really feel like there weren’t enough problems in the east to overcome the good in the west,” said Jacob Burks, a hedge broker at First Capitol Ag. “They don’t grow a ton of corn in western Kansas and they’ve got 200 bushel corn out there.”
Wheat has been weather-driven over recent days, said Joe Camp, a risk management specialist with Agrivisor LLC.
Rain is expected from Texas to Illinois in the next 48 hours, while a mix of rain and snow is expected in the Dakotas and Minnesota. There is also mounting concern about rainy weather in Australia damaging wheat quality, Camp said.
Adding to wheat’s woes is the poor U.S. export outlook, as recent tenders from buyers in the Middle East and Africa have found U.S. wheat too expensive.
Additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore.