Chicago | Reuters — Chicago Board of Trade (CBOT) wheat and corn futures strengthened on Tuesday on technical moves as traders seek to unwind short positions ahead of uncertain springtime weather and upcoming U.S. Department of Agriculture reports, analysts said.
Soybeans ended mostly lower, with the most-active May contract SK24 pressured by hefty South American supplies and decreased Chinese appetite for U.S. soy.
“We’ve had a nice rally as we’re getting near to risk season,” said Jim Gerlach, president of Indiana-based A/C Trading, referring to uncertain U.S. springtime weather. “Now we’re at a point of market equilibrium. Things were so over-sold in February, but that doesn’t mean we’re transitioning into a bull market.”
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Most-active CBOT wheat Wv1 settled up 9-3/4 cents, or 1.8 per cent, at $5.52-1/2 per bushel.
Benchmark wheat had jumped 2.7 per cent on Monday to pull away from last week’s 3-1/2 year low, as news of Russian attacks on the Ukrainian port of Odesa revived worries about war disruption to massive grain exports through the Black Sea. Huge supplies of cheap Russian wheat continue to hang over the market.
Corn futures rose on spillover strength from wheat and potentially unfavorable weather in the U.S. Corn Belt.
CBOT corn Cv1 settled up 3-1/2 cents at $4.39-1/2 per bushel while CBOT May soybeans SK24 ended down 2-1/4 cents at $11.85-1/2 a bushel.
Generally strong crop prospects in South America kept prices anchored, but worries over dry weather in Brazil and the U.S. Midwest underpinned the market, analysts said.
Traders are also adjusting their positions ahead of the USDA’s March 28 Prospective Plantings and quarterly stocks reports, which have a history of jolting markets.
A rise in the dollar index curbed Chicago futures by making U.S. grain more expensive overseas. The greenback strengthened ahead of the Federal Reserve’s latest outlook for rates on Wednesday.
Like wheat, corn and soybean futures have hit three-year lows in the past month.
“Overall we’re not doing anything too terribly exciting, and it’s a little bit of a holding pattern,” Matthew Wiegand, consultant at FuturesOne, said.
–Additional reporting for Reuters by Gus Trompiz in Paris and Peter Hobson in Canberra.
