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Soybeans rebound, grains end mixed

10/03/2012 @ 3:05pm

U.S. soybean futures settled mixed Wednesday after lower prices attracted buying interest, but expectations for a larger crop limited gains.

Chicago Board of Trade soybeans for November delivery settled up 1 1/4 cents or 0.1% at $15.31 3/4 a bushel. January soybeans fell one cent or 0.1% to $15.32 1/4 a bushel.

November soybeans traded as low as $15.04 a bushel overnight and dropped close to that level again by mid-morning, but then rebounded as the low prices attracted new buying. With soybeans down substantially in the past month, market participants who had bet on lower prices likely bought futures Wednesday to take profits on those positions, traders said. As of settlement on Wednesday, soybeans were down 13.5% from their all-time closing high of $17.71 a bushel reached on Sept. 4.

Negative technical signals and improving expectations for the U.S. soy crop have fueled a selloff since then, with speculative managed funds as the key sellers, traders say.

On Wednesday, the drop close to $15 a bushel brought soybeans into resistance on technical charts, helping prevent further losses. That fueled short-covering and buying by market participants still concerned about tight soybean supplies after the severe U.S. drought this year withered crops, traders said.

"The funds have flushed what they need to right now," said Rich Feltes, vice president of research for R.J. O'Brien. "The selling pressure was exhausted."

But gains for soybeans were still limited by expectations improving for the U.S. soybean crop. Anecdotal yield reports from farmers have been better than analysts once feared.

Condition ratings reported for the soybean crop by the federal government posted their third-best improvement for the month of September since 1986, said Joel Karlin, an analyst with Western Milling.

Trading is also choppy as market participants brace for the U.S. Department of Agriculture next week to update its forecasts for U.S. corn and soybean production.

Corn futures ended slightly lower, as traders weighed tight overall supplies against improved expectations for the U.S. crop and worries about softened demand for the grain. Harvest-season pressure from an influx of supplies also continued to weigh on prices.

December corn fell 1 1/2 cents or 0.2% to $7.56 3/4 a bushel.

Wheat futures mostly ended slightly higher. Egypt's state-owned wheat buyer, the General Authority for Supply Commodities, said Wednesday it bought a total of 240,000 metric tons of French and Argentinian wheat for shipment December 11-20.

The purchase fueled worries about lackluster export demand for U.S. wheat, but some traders remained optimistic that demand will pick up in coming weeks. That kept futures prices from falling. Wheat futures also benefited from worries about dry soil in the southern Plains, as farmers there plant a new wheat crop.

CBOT December wheat settled up 1 1/2 cents or 0.2% at $8.73 a bushel. KCBT December wheat fell 1 1/4 cents or 0.1% to $8.91 a bushel. MGEX December wheat rose 5 1/2 cents or 0.6% to $9.29 3/4 a bushel.

-Matt Bradley contributed to this article.
Write to Owen Fletcher at owen.fletcher@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
October 03, 2012 15:58 ET (19:58 GMT)
DJ U.S. GRAIN AND SOY REVIEW: Soybeans Rebound to End Mixed->copyright

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