Agweek file photo.
U.S. corn, soy hit four-week highs; wheat follows
CHICAGO – U.S. soybean and corn futures firmed early on Friday, hitting four-week highs on concerns about rains slowing early soybean harvest in Brazil and investor hopes of stimulus measures in China, traders said.
Wheat futures also rose, following corn and soybeans higher amid a mild round of short-covering. Traders also cited technical buying in wheat after European wheat hit contract lows.
"Grain futures are higher across the board this morning, with traders returning from the three-day weekend to find spirits improved by news of out China," Bryce Knorr, senior editor at Farm Futures Magazine, said in a research note.
Chicago Board of Trade soybean futures for March delivery were up 5 cents at $8.84 at 10:08 a.m. CST (1608 GMT) while CBOT March corn gained 4-3/4 cents to $3.68 a bushel.
Corn hit its highest since Dec. 22, while soybeans peaked at their highest since Dec. 23.
China’s economy grew at its weakest pace in a quarter of a century last year, raising hopes Beijing would cushion the slowdown with more stimulus policies, which in turn prompted a rally on the country’s rollercoaster share markets.
Heavy rains are forecast in Brazil’s center-west grain belt this week, meteorologists said, helping some newly cultivated areas to recover from last year’s dry weather but raising concerns for farmers who are ready to harvest.
The market has generally been anticipating bumper soybean crops in South America, and the supply pressure has been exacerbated by moves from Argentina’s new government to scale back export barriers.
"The overall supply picture in South America is positive, but you do see a few jitters about weather events and what they can do to crops," National Australia Bank agribusiness economist Phin Ziebell said.
Traders said that large short positions held by investors meant that grain markets were prone to sporadic rallies, especially given sensitivity to South American weather this time of year.
CBOT March wheat futures were up 3 cents at $4.76-3/4, with gains kept in check by export concerns.
Sales of Argentine wheat to the United States was cited as a key factor that pushed down European futures to contract lows on Monday.
The U.S. Agriculture Department said on Tuesday morning that weekly export inspections of wheat came in at 340,842 tons, near the low end of market forecasts.