Wheat leads grains higher Wednesday
U.S. wheat futures rose Wednesday, boosted by technical buying and expectations for stronger demand.
Chicago Board of Trade May wheat futures settled up 14 cents or 1.9% at $7.36 a bushel, a one-month high. KCBT May wheat rose 14 1/2 cents or 1.9% to $7.66 1/4 a bushel. MGEX May wheat rose 10 3/4 cents or 1.3% to $8.09 1/2 a bushel.
CBOT May wheat on Wednesday attracted a fresh wave of buying by speculative traders after the contract rose above its intraday highs of March 1 and March 14. Traders saw the new high as a sign that prices were likely to continue rising.
Much of the buying was likely done by market participants looking to exit earlier bets on price declines, traders said. Speculative managed funds in recent weeks have held a large net-short position in CBOT wheat.
The rally may not continue Thursday if short-covering turns out to have been the primary driver, since that activity could slow, traders said.
Wheat traders were also encouraged by hopes of strong wheat demand for use in animal feed and for export.
A U.S. Department of Agriculture report last week showed U.S. wheat export sales well exceeded analysts' expectations, and traders expect strong sales again when the weekly report comes out Thursday morning.
The USDA hasn't reported any large wheat export sales in the last week, but a series of smaller sales could add up to create a strong weekly sales report Thursday, said Larry Glenn, an analyst at Frontier Ag, a commodities brokerage in Quinter, Kan. "One can quietly do some business and stay under the radar," he said.
Traders will watch a USDA report next week on domestic grain stockpile levels for confirmation of how strong wheat demand has been recently as a substitute for corn in animal feed.
Soybean futures rose Wednesday on bargain-hunting after a six-day string of declines took May soybeans to a two-month closing low.
May soybean futures rose 13 cents or 0.9% to $14.19 3/4 a bushel.
Corn futures were pulled higher by the gains in wheat. Corn also benefited from a government report showing domestic ethanol production last week rose 1.5%, seen as a sign of improving corn demand.
May corn futures rose four cents or 0.5% to $7.32 1/2 a bushel, a fresh six-week high for the contract.
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(END) Dow Jones Newswires
March 20, 2013 15:33 ET (19:33 GMT)
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