CHICAGO: Chicago Board of Trade wheat futures rose on Friday, rallying after news that China cancelled more purchases of US wheat pushed the benchmark contract to a fresh 3-1/2 year low.

Corn and soybean futures turned higher following an uneventful monthly supply/demand report from the US Department of Agriculture (USDA), analysts said.

At 12:25 p.m. CST (1825 GMT), Chicago Board of Trade (CBOT) May wheat was up 13-1/2 cents at $5.42 a bushel. May corn was up 1 cent at $4.39 a bushel and May soybeans were up 6-3/4 cents at $11.73 a bushel.

Wheat posted the biggest percentage move, bouncing after a multi-year low. Commodity funds hold a large net short position in CBOT wheat futures, leaving the market open to bouts of short-covering.

Values had fallen after the USDA said China cancelled purchases of 240,000 metric tons of US red winter wheat on Thursday and Friday, following price drops in the wake of a buying spree by Chinese importers last year.

Worries about global demand for US wheat continued to hang over the wheat market. In its monthly supply/demand report, the USDA lowered its forecast of 2023/24 US wheat exports to 710 million bushels, from 725 million previously.

The corn and soybean markets showed little reaction to the USDA’s report. The agency slightly trimmed its estimates for Brazil’s soy crop, world soybean stocks and world corn stocks. But its forecast for Brazil’s soybean crop, at 155 million metric tons, came in above the average of estimates among analysts surveyed by Reuters.

“This is a punt, this is a neutral report, nothing to write home about,” Ted Seifried, chief market strategist at Zaner Group, said. CBOT corn, soybean and wheat futures are all hovering near their lowest levels since 2020, anchored by competition from hefty global grain supplies.

Seifried was cautiously optimistic about the markets’ response to the report. “It’s a sigh of relief. We’re well off our lows now that the report has come out,” Seifried said. “We’re back to where we were yesterday.”