U.S. grains: Corn, wheat rebound on technicals, dollar declines

Chicago | Reuters — U.S. grains jumped as much as one per cent on Wednesday, with corn rebounding from a six-month low and wheat from a nearly five-year low on support from short covering and a weaker U.S. dollar.

Soybeans also gained at the Chicago Board of Trade, buoyed by a strike of boat captains at the main grains port in Argentina, the top exporter of soymeal and soyoil.

Each market rallied to session highs in the final minutes of trading, in the wake of a U.S. Federal Reserve statement that suggested the bank may wait for better economic growth before hiking interest rates.

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The dollar fell to a nine-week low after earlier data showing the U.S. economy growing more slowly than expected.

“The lower dollar is helping keep the shorts out of the (grains) market,” said Global Commodities Analytics analyst Mike Zuzolo. “You still have major demand issues to contend with, preventing a major short-covering rally… that would encourage new longs to come in as well.”

Russia’s deputy prime minister told reporters the country will make a decision by mid-May — ahead of schedule — on whether to remove a tax on wheat exports.

Exporters in Russia, Ukraine and Europe have stolen away market share from shippers in the U.S. in recent years while a U.S. outbreak of avian flu affecting millions of turkeys and chickens also created worries of corn and soymeal demand.

Front-month CBOT May corn finished two cents higher at $3.63 per bushel, while CBOT May wheat climbed 5-3/4 cents, or 1.3 per cent, to $4.77-1/4 (all figures US$).

CBOT May soybeans were up 11 cents to $9.88-1/2 per bushel while soymeal delivered in May jumped two per cent to $324.20 per ton, the highest in three weeks.

“This morning, all the talk is Argentina… that is the reason the bean market has been held up here,” said AgResource Co. president Dan Basse.

Weather conditions capped gains in grain prices, with crop-friendly rains for wheat in France and Germany and in the southern U.S. Plains. In the U.S. Midwest corn belt, forecasts called for dry conditions and warmer temperatures, ideal for spring corn sowings.

The outlook in the U.S. Midwest was favourable for planting for most of the next two weeks, the Commodity Weather Group said in a note to clients.

“Any interruptions to fieldwork are still limited in scope until broader rains arrive next Wednesday,” the agency said.

Michael Hirtzer reports on grain markets for Reuters from Chicago. Additional reporting for Reuetrs by Julie Ingwersen in Chicago, Michael Hogan in Hamburg and Naveen Thukral in Singapore.

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