September 20, 2013
Chicago Board of Trade wheat futures rose 2 percent Thursday, on track for the biggest daily rise in 3-1/2 weeks, as strong weekly US export sales and technical strength inspired a round of short-covering, traders said. Corn followed wheat higher while soyabeans declined. At the CBOT as of 10:54 am CDT (1554 GMT), December wheat was up 12-1/4 cents at $6.58-3/4 per bushel, after hitting a two-week high at $6.62-1/2. Gains accelerated as the contract broke through its 50-day moving average near $6.58.
December corn was up 4-1/4 cents at $4.60-1/2 per bushel and November soyabeans were down 10-3/4 cents at $13.37 a bushel. Wheat drew support from bullish export sales data. The US Department of Agriculture reported sales of US wheat in the latest week just above 700,000 tonnes, topping trade expectations, and export shipments of 1.2 million tonnes, the biggest weekly tally in records dating to 1990. “Chicago is underpinned with another really good week in export sales. The market is taking notice, and teaming that up with the quality problems we are hearing about in Russia and Kazakhstan, the Black Sea region,” said Mike Zuzolo, president of Global Commodity Analytics in Atchison, Kansas.
Traders noted Brazil bought 120,400 tonnes of US wheat in the last week. Brazil is not typically a major buyer of US wheat but has turned to the United States and other suppliers following poor crop weather in South America. “You’ve had three frost events in Brazil, so the South American crops are in question, and people are watching that,” said Roy Huckabay with the Linn Group, a Chicago brokerage. Wheat drew additional support from a drop in the value of the US dollar following a surprise decision Wednesday by the Federal Reserve to maintain its stimulus.
Wheat competes in a global market, and a weaker dollar makes US supplies more attractive to those holding other currencies. Additionally commodity funds hold a massive net short position in CBOT wheat, leaving the market vulnerable to short-covering. Corn followed wheat higher. But gains were limited by the start of the US harvest, with farmers poised to bring in the largest crop on record. The USDA last week forecast the corn crop at 13.8 billion bushels. Soyabeans fell on long liquidation and expectations that rains in the US Midwest this week could benefit some late-maturing crops in a few areas. “Around 20 to 25 percent of the beans can still benefit from a rain,” Huckabay said. Courtesy Reuters
Published in ZaraiMedia.com