Wheat, corn and soy take breather after short-covering rally

PARIS/CANBERRA: Chicago wheat, corn and soybean futures eased on Thursday from multi-week highs as a wave of short-covering fuelled by weather and export news abated, while investors awaited more US economic data.

Large global supplies that had pushed prices to near four-year lows in recent months were also keeping a lid on grain markets, analysts said.

The most-active wheat contract on the Chicago Board of Trade (CBOT) was down 1.3% at $5.73-1/2 a bushel at 1052 GMT after reaching its highest since early July on Wednesday.

CBOT corn dipped 0.4% to $4.11 a bushel after hitting its highest since late July a day earlier. CBOT soybeans fell 0.8% to $10.13 a bushel, moving away from a near four-week top struck on Tuesday.

Jitters about economic growth had pushed the dollar lower and encouraged short-covering on grain markets where investors had built up big short positions. But financial markets were calmer on Thursday as participants looked ahead to US jobs figures on Friday.

Despite a dry end to the US growing season and drought in Brazil that may hamper early planting, corn and soybean markets were expected to be well supplied.

“Soy and corn will struggle to hang on to the rally because there’s too much of it coming,” said Ole Houe at IKON Commodities in Sydney.

In Brazil, the biggest shipper of soybeans, whose harvest has already wrapped up, the area planted with soy will increase in 2024/25 at its slowest pace in almost two decades due in part to low prices, agribusiness consultancy AgRural said. Farmers are set to start sowing this month, although bad weather is likely to delay some field work. US growers, meanwhile, will reap corn and soybean crops in the coming weeks, with the market assessing to what extent bumper yield potential has been dented by the dry end to summer in the US Midwest.

StoneX on Wednesday lowered its US corn production estimate to 15.127 billion bushels from 15.207 billion, and raised its estimate for US soybean output to 4.575 billion bushels from 4.483 billion.