US corn and soyabean futures edged higher on Monday, lifted by investor short-covering and position-squaring ahead of the monthly US Department of Agriculture supply and demand report due on Tuesday. The USDA said earlier that top soyabean importer China purchased 120,000 tonnes of the grain within 24 hours, while analysts at AgRural and FCStone reduced forecasts for the crop in Brazil.
"The attitude is that the Brazil crop size will come down (in the USDA report), that you could see heightened soyabean disappearance from exports and a heightened disappearance (for corn) from ethanol usage," EFG Group analyst Tom Fritz said. Still, the USDA was likely to make only minor adjustments to its forecasts, and global grain supplies were ample in the early days of bumper South American harvests, which follow record-high US corn and soya crops last autumn.
Corn for delivery in March gained 5-1/2 cents to $3.91-1/4 per bushel, the highest level in more than two weeks, while soyabeans for March delivery were up 5 cents at $9.78-1/2 at the Chicago Board of Trade. CBOT March wheat was up 2-3/4 cents at $5.29 per bushel, capping an "inside day" on the charts in thin volume after notching its first weekly gain in seven weeks last week.
Soyabeans reversed from earlier narrow losses tied to weak economic data out of China. The country imported 6.88 million tonnes of soyabeans in January, down 19.3 percent from 8.53 million tonnes in December, figures from the General Administration of Customs of China showed.
China's overall trade performance slumped in January, with exports falling 3.3 percent from a year earlier and imports tumbling 19.9 percent, far worse than analysts had expected and highlighting deepening economic weakness. Some traders were exiting short positions ahead of the USDA report after US Commodity Futures Trading Commission data released on Friday showed a spike in bearish bets in corn and wheat. Investors, including hedge funds, had their smallest long stake in corn since October. "Being short isn't working, so it's time to pull out," Price Group analyst Jack Scoville said of Monday's grain trade.
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