U.S. grains: Wheat rises on technical bounce, export prospects

Chicago | Reuters — U.S. wheat futures rose about 1.4 per cent on Thursday, reaching a one-week high on a technical rebound from multi-month lows and optimism about U.S. export prospects, analysts said.

Soybeans hit a two-week top on worries about declining Brazilian crop prospects and rumours of Chinese buying interest, and corn followed the firm trend, posting a session high near the close.

Chicago Board of Trade March soft red winter wheat settled up seven cents at $5.13-3/4 a bushel (all figures US$). A day earlier, the contract dipped to $5.01-1/4, its lowest since January 2018. When the contract failed to drop below psychological support at $5, buyers returned.

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“It’s more technical than fundamental today,” said Terry Reilly, senior analyst with Futures International in Chicago.

Excessive moisture in Argentina’s wheat belt remained a worry.

“Traders are still a little bit nervous about the Argentine crop quality, and also U.S. wheat is getting a little more competitive,” Reilly said.

A weaker dollar lent background support, making U.S. grains more competitive globally, at a time when winter weather may be slowing shipments from top exporter Russia.

“U.S. wheat became competitive over the holidays, inviting active buying to start the new calendar year,” Arlan Suderman, chief commodities economist at INTL FCStone, said in a client note.

Soybean futures ticked higher as the oilseed market assessed weather risks for Brazilian crops and sought evidence of more Chinese purchases of U.S. supplies as part of a trade truce.

CBOT March soybeans ended up 5-3/4 cents at $9.12-3/4 a bushel after reaching $9.13-1/2, its highest since Dec. 20.

China last month resumed large purchases of U.S. soybeans after Washington and Beijing agreed to a 90-day truce in a trade dispute that has brought tit-for-tat tariffs on goods including soybeans, the most valuable U.S. agricultural export to China.

Chatter about further Chinese purchases has buoyed soy futures at the turn of the year.

However, a partial government shutdown in the United States has prompted the U.S. Department of Agriculture (USDA) to suspend daily and weekly export sales reports, depriving traders of potential confirmation of further deals.

“Traders are trying to verify the rumors of Chinese soybean import interest from the (United States). We don’t see it reflected in the cash market,” Reilly said.

USDA will decide on Friday whether to delay a series of crop reports scheduled for release on Jan. 11.

CBOT March corn settled up four cents at $3.79-3/4 after the contract pushed through chart resistance at its 50-day moving average at $3.79 near the close.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago; additional reporting by Gus Trompiz in Paris and Emily Chow in Kuala Lumpur.

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