GRAINS-US wheat futures bounce after 3-1/2 year low; soy, corn climb
CHICAGO, March 8 (Reuters) – Chicago Board of Trade soybean and corn rose on Friday, extending their recovery from three-year lows set last month, following an uneventful monthly supply/demand report from the U.S. Department of Agriculture (USDA), analysts said.
Hefty global grain supplies and strong competition for export business continued to anchor prices, but the worst of the news may have been factored into prices for the time being, said Rich Nelson, chief strategist at Allendale Inc.
“We’ve been plagued with terrible news over and over, and perhaps we’ve seen the worst of it. I think we’ve hit the low for now,” said Nelson.
Chicago Board of Trade (CBOT) May wheat WK24 settled up 9-1/4 cents at $5.37-3/4 a bushel. May corn CK24 was up 1-3/4 cents at $4.39-3/4 a bushel and May soybeans SK24 were up 17-3/4 cents at $11.84 a bushel.
For the week, benchmark corn futures rose 3.8% and soybeans rose 2.8% while wheat fell 3.6%.
Commodity funds hold large in all three commodities, leaving the markets open to bouts of short-covering.
In its monthly supply/demand report, the USDA slightly trimmed its estimates for Brazil’s soy crop, world soybean stocks and world corn stocks. But its forecast for Brazil’s soybean crop, at 155 million metric tons, came in above the average of estimates among analysts surveyed by Reuters.
“This is a neutral report, nothing to write home about,” said Ted Seifried, chief market strategist at Zaner Group.
Seifried was cautiously optimistic about the markets’ response to the report.
“It’s a sigh of relief. We’re well off our lows now that the report has come out,” Seifried said. “We’re back to where we were yesterday.”
Wheat posted the biggest percentage move on Friday, bouncing after a multi-year low established earlier in the session. Values tumbled after the USDA said China had cancelled more purchases of U.S. soft red wheat. The USDA confirmed cancellations of 130,000 tons of the grain on Thursday and another 110,000 tons on Friday.
Traders had heard rumors of the cancellations and had already factored the news into the market, Seifried said.
Echoing worries about export demand for U.S. wheat, the USDA in its monthly report lowered its forecast of 2023/24 U.S. wheat exports to 710 million bushels, from 725 million previously.
Source Link: https://www.nasdaq.com/articles/grains-us-wheat-futures-bounce-after-3-1-2-year-low-soy-corn-climb
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