Chicago | Reuters — U.S. wheat prices climbed on Tuesday in a light rebound from multi-month lows set on Monday, although forecasts for much-needed rains in the Plains wheat belt kept a lid on gains, analysts said.
Corn firmed and soybeans edged higher after a choppy session as traders adjusted positions ahead of a pair of key crop reports due Friday from the U.S. Department of Agriculture.
Chicago Board of Trade May wheat settled up 3-3/4 cents at $4.24-1/2 per bushel (all figures US$). The contract hit a 2-1/2 month low on Monday at $4.18-1/4.
CBOT May corn ended up two cents at $3.57-3/4 a bushel and May soybeans rose 1/2 cent at $9.72 a bushel.
Wheat bounced back after expectations for rains in the Plains pressured futures over most of the last week. The showers should bolster yield prospects for the developing winter wheat crop.
“Although the forecast looks fantastic this week, I think some traders are standing aside to see if the rains actually do develop, before they add on to short positions,” said Terry Reilly, senior commodity analyst with Futures International in Chicago.
The outlook for rains across the Plains, the southern Midwest and the Mississippi River Delta over the next week also supported corn futures by threatening to delay seeding in those areas. However, planting is still a few weeks away in core Corn Belt states like Iowa and Illinois.
“In the long run … the rainfall will be beneficial for supporting germination and early growth of the corn crop,” MDA Weather Services said in a note to clients.
CBOT corn firmed a day after the May contract dipped to $3.54-1/4, its lowest level of 2017.
Some traders were adjusting positions ahead of USDA’s planting intentions and quarterly stocks reports, which have been known to jolt markets.
“Much of what we are seeing is simple position-squaring ahead of Friday’s USDA reports… To see a limit or near-limit move in the corn complex when the stocks and acreage intentions are released is not uncommon,” Karl Setzer, a market analyst with the MaxYield Cooperative, wrote in a note to clients.
Analysts expect a 5.7 per cent jump in U.S. soybean sowings from a year ago but reductions in corn of 3.2 per cent and an eight per cent cut in wheat sowings.
CBOT soybean futures closed fractionally higher after hitting their lowest level in about five months the previous day, with bumper South American harvests keeping a lid on gains.
— Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Michael Hogan in Hamburg and Colin Packham in Sydney.