CANBERRA: Chicago wheat futures rose on Thursday after ample supply and the placing of bearish bets by speculators powered a weeks-long sell-off that drove prices to a five-year low on Wednesday.
Corn futures also gained after falling to contract lows in the previous session, and soybeans edged up from their lowest price levels since April. As with wheat, global supply of both crops is plentiful.
The most-active wheat contract on the Chicago Board of Trade (CBOT) was up 0.6% at $5.11-1/2 a bushel at 0537 GMT after falling as low as 5.04 on Wednesday.
CBOT corn rose 0.7% to $4.04 a bushel and soybeans climbed 0.2% to $9.86-1/4 a bushel.
Northern Hemisphere wheat harvests have been flooding the market with new-crop grain. Export competition is strong and demand not large enough to support prices.
Wheat from central area of Russia, the biggest exporter, is reaching ports, easing concerns about availability after poor early harvest results in southern regions.
Recent rainfall has boosted the outlook for harvests in Canada, Australia and Argentina, traders said.
Falling corn futures have also dragged down wheat by incentivising poultry and livestock producers turn feed cheap corn to their animals instead of wheat.
The U.S. is expected to produce bumper corn and soy harvests later in the year. Analysts polled by Reuters think the U.S. Department of Agriculture will raise its estimates in a monthly report due on August 12.
Funds have expanded their net short position in CBOT wheat, corn and soybeans in the last couple of weeks, traders say.
Hanging over prices are concerns that U.S. President Donald Trump’s aggressive trade policies will result in lower exports of U.S. grains and oilseeds.
China’s buying of several cargoes of Argentinian soymeal “is clearly sending a message to the United States that it can find ways to fill its needs without U.S. soybeans,” StoneX analyst Arlan Suderman wrote in a note.
Analysts at JPMorgan also this week said “heightened uncertainty, particularly surrounding the future of US-China trade and wider implications for global growth, is contributing to a widespread state of apathy across row crop markets.”
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