Chicago | Reuters — Chicago Board of Trade wheat futures surged four per cent on Thursday, recovering from a 4-1/2-month low a day earlier, as recession fears in financial markets eased.
Soybean futures climbed three per cent and corn rose two per cent in their own moves away from multi-month lows touched in the previous session.
Traders said the markets had become technically oversold following recent declines. They continue to face an uncertain supply outlook as the Ukraine war disrupts Black Sea grain exports, while U.S. crops enter crucial summer growth phases.
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Forecasts for dry weather in the U.S. Midwest through the middle of July, a critical period for corn development, helped support gains, analysts said.
“The soybean market has looked terrible technically, but the momentum indicators are beginning to turn higher,” said Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage. “Weather uncertainty into the critical August period should support prices for the time being.”
The most actively traded CBOT wheat contract settled up 32 cents at $8.36-1/2 per bushel, after dropping to its lowest since Feb. 17 at $7.85-1/4 on Wednesday (all figures US$).
Most-active soybeans gained 42-3/4 cents to end at $13.65-1/2 a bushel, and corn strengthened 11-1/4 cents to finish at $5.96-1/4.
Chart support levels, an easing in the dollar from 20-year highs and an uptick in crude oil encouraged grain markets to bounce, traders said. U.S. equities also rose, as investors bet on economic light at the end of the Federal Reserve’s rate hiking tunnel.
Some agricultural traders see the potential for further grain rallies given demand from importers and the protracted conflict in Ukraine.
Ukraine’s foreign ministry said it will summon Turkey’s ambassador after a Russian-flagged cargo ship suspected of carrying stolen Ukrainian grain left a Turkish port.
In demand news, Egypt’s state grains buyer ramped up direct purchases of imported wheat this week.
On Friday, the U.S. Department of Agriculture is slated to issue weekly U.S. grain export sales data.
— Reporting for Reuters by Tom Polansek in Chicago, Gus Trompiz in Paris and Naveen Thukral in Singapore.
