Chicago | Reuters — U.S. corn, soybean and wheat futures rallied on Thursday, supported by technical buying and hopes for a pick-up in export demand as recent price declines made U.S. supplies more attractive to overseas buyers.
Corn was bouncing off the near 3-1/2-year low it hit on Wednesday after a rout in the energy market slashed demand for the yellow grain at ethanol producers.
Traders said there was talk that recent price declines had sparked demand for a range of commodities from China but there were no confirmations of any deals.
“There is some Chinese interest for U.S. products,” said Brian Hoops, president of Midwest Market Solutions. “Those are all rumours we’ve been hearing that’s fueling some of the rally. It is really just short-covering because of speculation that China’s going to end up buying some product.”
But the gains across the agricultural contracts were seen as fragile, with the threat of the coronavirus pandemic wrecking global demand for commodities continuing to cast a bearish tone over the markets.
“We can bounce up on rumors but to stay up we are going to need physical grain movement,” said Ben Buie, grain team leader at MaxYield Cooperative in West Bend, Iowa.
The U.S. Agriculture Department on Thursday morning said that export sales of wheat totaled 482,000 tonnes in the week ended March 12, in line with a range of market forecasts. Corn export sales of 960,600 tonnes and soybean export sales of 701,200 tonnes also matched trade estimates.
Chicago Board of Trade May soft red winter wheat futures settled up 26-3/4 cents at $5.35 a bushel (all figures US$).
Traders said wheat was drawing support from increased demand for food as people bulk buy due to expectations of shortages amid the coronavirus outbreak.
Three South Korean flour mills bought a total of approximately 136,000 tonnes of milling wheat to be sourced from the United States in a tender, European traders said.
CBOT May corn was 10-1/4 cents higher at $3.45-1/2 a bushel and CBOT May soybeans were 17-3/4 cents higher at $8.43-1/4 a bushel.
The rise in prices on Thursday came as a growing number of central banks vowed stimulus efforts.
The European Central Bank on Wednesday pledged to buy 750 billion euro (C$1.16 billion) in bonds through 2020.
A rebound in crude oil prices also lent support.
— Mark Weinraub is a Reuters commodities correspondent in Chicago; additional reporting by Chris Walljasper in Chicago, Colin Packham in Sydney and Sybille de La Hamaide in Paris.