Chicago | Reuters — U.S. grain and soybean futures prices rebounded on Thursday on renewed Chinese buying of corn and soy and as forecasts for sub-freezing temperatures across the country stoked concerns that some vulnerable crops may sustain damage.
Gains, however, were tempered by plentiful supplies and worries about demand as traders started positioning ahead of the monthly U.S. Department of Agriculture supply-and-demand report due next week. The report is expected to show stocks of wheat, corn and soybeans remain ample.
USDA on Thursday confirmed private sales of 686,000 tonnes of U.S. corn to China for shipment in the current and upcoming marketing years. That followed several daily soybean sales announcements in recent days.
“China came in for some soybeans this week and we saw today they bought some corn too,” said Craig Turner, senior commodities broker with Daniels Trading.
“People are playing into the weather forecast too, with the cold and the freeze coming. We’ve also got the (USDA) report next week and, while all the estimates are bearish, people that have been short all this time are looking for an excuse to take some profit heading into it,” he said.
Frosty temperatures expected in the U.S. Midwest on Saturday could threaten newly planted corn crops and developing soft red winter wheat, according to meteorologists.
“The cold will damage some of the recently emerged summer crops in the Midwest and may raise some threat to soft wheat, as well,” brokerage Allendale said in a note, citing the potential for frost and freezes in the Midwest this weekend.
Chicago Board of Trade July soybeans rose 11-3/4 cents to settle at $8.45-1/2 a bushel (all figures US$). CBOT July wheat gained three cents to $5.22-1/2 a bushel while July corn rose 3-3/4 cents to $3.18 a bushel.
Earlier gains in crude oil markets gave corn prices some underlying support, although demand from producers of corn-based ethanol remains tepid.
In next Tuesday’s report, USDA is likely to cut its forecast for corn use by the ethanol sector, which until recently had consumed more than a third of every U.S. crop.
Weekly USDA export sales data released early on Thursday showed corn, soybean and wheat net export sales largely in line with trade expectations.
— Reporting for Reuters by Karl Plume in Chicago; additional reporting by Naveen Thukral in Singapore and Sybille de La Hamaide in Paris.