Wheat futures rose 1.6 percent at the Chicago Board of Trade on Thursday on heavy short covering after pressure from a firm dollar pushed prices to their lowest level in more than a week early in the session, traders said. "It looked like wheat was trying to find a little bit of a bottom," said Jason Britt, analyst with Central States Commodities. "The market had gotten a little bit oversold, a little bit overdone."
Wheat rallied despite warm and wet weather in the US Plains that boosted prospects for this year's crops. Some traders warned that the early emerging winter wheat crop was vulnerable to damage from a freeze should temperatures buck forecasts and drop sharply in the coming weeks.
Corn futures also closed higher as traders unwound their soyabean/corn spreads as wheat prices climbed. Better-than-expected export demand for both corn and wheat added further strength to the market. CBOT soyabeans fell, hampered by disappointing exports and fears that economic concerns will slash demand from top soya buyer China, traders said.
China's economic momentum slowed in March as factory activity shrank for a fifth straight month, according to the HSBC flash purchasing managers index, the earliest indicator of China's industrial activity. CBOT May wheat settled up 10 cents at $6.46-1/4 a bushel. The gain for the benchmark contract was the biggest in percentage terms since March 15.
CBOT May corn gained 2-1/2 cents to close at $6.44-1/2 a bushel. "Corn and wheat seem to be finding a little stability," said Bill Gentry, a broker for Risk Management Commodities. "I think (they) are trying to regain their composure." CBOT May soyabeans dropped 5-1/2 cents to $13.49-1/2 a bushel. Soyabeans have fallen in three of the last four days, setting back from a four session winning streak last week.
A weekly US Agriculture Department report showed that export sales of soyabeans were just 532,800 tonnes, the lowest in seven weeks and below the low end of trade estimates for 900,000 to 1 million tonnes. "I think the export sales were very disappointing," said Mike Zuzolo, analyst for Global Commodity Analytics in Indiana. "That HSBC PMI and the export sales go hand in hand with the trade psychology."