Wheat Prices Rebound On Short-Covering, But Ample Supply Caps Gains
Chicago wheat futures rose on Thursday and were set to gain for two out of three sessions amid expectations of short-covering by funds, but abundant world supplies kept a lid on prices.
Corn and soybeans were on track to climb for a third consecutive session, with prices supported by planting delays in the U.S. Midwest.
Investment funds hold massive short positions, unusual for this time of year, and many traders were concerned they would begin to start covering them if farmers' seeding efforts were stymied by wet fields and cold soil temperatures.
The most-active wheat contract on the Chicago Board of Trade was up 0.8% at $4.50-3/4 a bushel by 0324 GMT. Wheat touched a 13 month low on Monday, but rebounded nearly 6% the following day.
Soybeans were up 0.3% at $9.04 a bushel, while corn rose 0.3% to $3.67-1/2 a bushel.
"It is mainly fund action which is moving wheat prices higher," said a trader at an international company which runs wheat mills in parts of Southeast Asia.
"As far as supplies are concerned, we are comfortable. The next crop is looking fine in Europe and even in the Black Sea region."
Tempered By Competition
Traders have built huge short positions in wheat in recent months amid expectations of bumper global supplies. Hopes of an upturn in U.S. wheat exports have been tempered by competition from other export zones such as western Europe and the Black Sea region.
Black Sea wheat exporters are boosting sales to Asia with last year's crop, a surprise move that is curbing demand for U.S. grain, traders said.
U.S. farmers are expected to plant 91.475 million acres of corn in 2019 and 84.263 million acres of soybeans, according to an annual survey conducted by commodity brokerage and analytical firm Allendale Inc.