Grain futures move up

January 12, 2013


US grain futures rose on Thursday, with corn touching a one-week high on the eve of crop reports expected to show drops in US production and global inventories. Soyabeans, however, fell on expectations that a large harvest in South America will pinch demand for the US crop.

Traders were evening up positions in the markets amid expectations that the US Department of Agriculture reports will spark sharp price swings, traders said. The USDA will issue a slew of data on global supply and demand, US corn and soya production, quarterly US grain inventories and US winter wheat plantings at 11 am CST (1700 GMT) on Friday.

“We’re going to see a lot of positioning and posturing” in the markets before the reports are issued, said Tim Hannagan, grain specialist at Alpari. Chicago Board of Trade corn for March delivery rose 2-3/4 cents, or 0.4 percent, to $6.97 a bushel by noon CST. March wheat gained 1 cent, or 0.1 percent, to $7.46-1/2, and March soyabeans dropped 2-1/4 cents, or 0.2 percent, to $13.83-1/4.

Corn and wheat traded at six-month lows last week following a year-end sell-off, and traders were buying back some previously sold positions in the run-up to Friday’s reports. In its final report on 2012 US crop production, USDA is expected to estimate last year’s drought-hit corn crop at a six-year low. Corn has swung by the maximum daily trading limit for six years in a row on the day of the department’s January announcements. But the severe US drought stressing winter wheat is more important for wheat prices than Friday’s USDA estimates for winter wheat seedings, analysts said.

Roughly 60.26 percent of the contiguous United States was in at least “moderate” drought as of January 8, a slight improvement from 61.09 percent a week earlier, according to a “Drought Monitor” report issued Thursday by a consortium of federal and state climatology experts. Severe drought still blanketed 86.20 percent of the High Plains, unchanged from the week before, while 60.25 percent of the region was classified in extreme drought. In its first disaster declaration of the new year, the USDA on Wednesday made growers in large portions of four major wheat-growing states – Kansas, Colorado, Oklahoma and Texas – eligible for low-interest emergency loans. Demand news did not help give prices much of a boost. Egypt, the world’s biggest importer of wheat, bought 55,0000 tonnes of US wheat and 60,000 tonnes of Canadian wheat in a tender for shipment February 20-28.

Courtesy: Reuters

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More