Wednesday, 01 July 2015 18:33
HAMBURG/SINGAPORE: Chicago corn and soybeans were little changed on Wednesday as the market took a breather after posting its biggest daily gain in five years on lower-than-expected US stockpiles and concerns about heavy rains damaging crops.
Wheat dropped more than 1 percent. It had hit its highest level since December on Tuesday as grains and soybean markets rose after the US Department of Agriculture (USDA) said US corn and soybean stocks on June 1 were up on a year ago, but below market forecasts due to heavy demand for both commodities.
“The markets had been driven up sharply by short-covering and this seems to have somewhat run its course today,” said Ole Hansen, head of commodity strategy at Saxo Bank. “We come from an extended short position in the managed money community and this past week has been a very painful exercise in short-covering.”
Chicago July corn was unchanged at $ 4.14 a bushel at 1055 GMT, remaining around its highest level since Dec. 29, hit on Tuesday.
July soybeans were unchanged at $ 10.56-1/4 a bushel after hitting their highest since Dec. 29 at $ 10.59-1/4 a bushel on Tuesday.
July wheat fell 1.1 percent to $ 6.08 a bushel after touching $ 6.13-1/2 on Wednesday, the highest price for a nearby contract since Dec. 30.
“The figures published by the USDA yesterday evening gave a renewed boost to the rally enjoyed by grains and oilseeds,” Commerzbank said in a market report. “US stocks of corn and soybeans as per 1 June were reported as being significantly lower than observers had anticipated.”
“Admittedly, stocks are noticeably higher than last year following the record US crops of 2014, yet unexpectedly strong demand has limited the increase in stock levels.”
US soybean stocks as of June 1 were 625 million bushels, up from 405 million bushels a year earlier, the USDA said. But quarterly consumption was 701 million bushels.
On Tuesday, commodity funds bought a net 40,000 Chicago Board of Trade soybean contracts, trade sources said. The funds also bought a net 25,000 corn contracts and 17,000 in wheat.
Although the USDA said wheat supplies were more than expected, wheat prices rose over the previous four sessions as heavy rains hit the hard red winter crop.
The USDA said it would resurvey US farmers in several states about plantings of soybeans and other crops due to the wet weather. The process will prolong uncertainty about acreage until release of the new data in August.
