Grain futures advance, wheat rebounds from 18-month lows

Grain futures advanced on Thursday, with wheat gaining for the first time in six days as some market players considered the 4.5% slump in the previous 5 trading sessions as excessive. Prices rebounded from yesterdays 18 month-low.

On the Chicago Board of Trade, wheat futures for settlement in March advanced 0.17% to trade at $6.1363 per bushel at 13:07 GMT. Prices jumped to a session high of $6.1588, while day’s bottom was touched at $6.1262 per bushel. On Wednesday prices touched $6.1238 per bushel, the lowest since June 15th 2012. The grain lost 3.3% last week, after declining 2.6% in the preceding 5-day period. Wheat has slumped 21% so far this year on expectations for a record-high global output of 711.42 million metric tons, according to data by the USDA.

“There is some short-covering after the sharp drop last night,” Tetsu Emori, a senior fund manager at Astmax Asset Management Inc. in Tokyo, cited by Bloomberg. “Prices are still heading to the downside, there’s no risk of supply disruption,” he added.

On December 10th, the government agency raised its November forecast before the start of the Northern Hemisphere harvests in 2014 to 182.78 million tons, up from 178.48 million tons. The revision was mainly due to the higher-than-expected Canadian and Australian harvests compared to a year ago.

DTNs December 18th forecast called for a new cold wave to move into the northern and western Midwest during the end of the week. This cold wave will be strongest in the northern half of the region, encompassing central Iowa and northern Illinois. Temperatures are expected to be below or even much below normal. Meanwhile, the eastern and southern portions of the region will see moderate to heavy rain, which will replenish moisture for wheat along with possible flooding. There is a probability of light to moderate precipitation, mostly rain during the end of the week in the Southern Plains, favoring the wheat crop.

Soybeans futures for settlement in January traded at $13.2613 per bushel at 13:10 GMT, adding 0.16% on a daily basis. Prices swung between day’s high and low of $13.2925 and $13.2338 per bushel respectively. The oilseed added 0.11% last week, after declining 0.85% in the preceding one. On December 10th, soybeans reached $13.5338, the strongest level since September 19th.

Corn

Corn futures for March delivery traded at $4.2588 a bushel by 13:11 GMT, advancing 0.21% for the day. Futures held in a range between day’s high and low of $4.2588 and $4.2438 per bushel. On December 16th, prices touched $4.2063, the lowest since December 2nd. Corn lost 2.2% last week, after gaining 2.6% in the preceding two 5-day-periods.

The grain declined yesterday amid speculations that China has rejected more than 500 000 metric tons of U.S. Corn in November and December containing the unapproved genetically modified insect-resistant MIR 162 substance, almost three times the amount it previously announced, according to an anonymous source with knowledge of the issue, cited by Bloomberg. According to the source, at least nine vessels each carrying about 60 000 tons of the grain have been refused. Seven out of the nine vessels were bought by the state owned COFCO Corp.

On December 6th, the Chinese Ministry of Agriculture said it rejected the grain because its safety should be considered. Meanwhile, the quarantine agency said on Tuesday that it found more of the US corn, containing the genetically modified substance, without giving a precise figure. The agency already reported on December 4th to have found 180 000 tons of the corn.

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