US wheat, corn and soyabean futures rose on Wednesday, rallying on bargain hunting after all three commodities fell to multi-month or multi-year lows a day earlier, traders said. But expectations of bumper US crops limited gains.
At the Chicago Board of Trade as of 12:52 pm CDT (1752 GMT), September wheat was up 10 cents at $4.11-1/4 per bushel. Benchmark December corn was up 1-1/4 cents at $3.35-1/4 a bushel and November soyabeans were up 3 cents at $9.56 a bushel. Wheat posted the biggest advance despite a bearish backdrop of record-large global wheat supplies. The spot contract dipped below $4 a bushel on Tuesday for the first time in a decade but quickly climbed back above that mark, a supportive technical signal.
"I think it's just short-covering.... Trying to track spec fund shorts after yesterday, it's probably the biggest net short we have seen to date," said Tom Fritz, partner with EFG Group in Chicago. The supplement to the US Commodity Futures Trading Commission's latest weekly commitments report showed non-commercials held a net short position in CBOT wheat of more than 142,000 contracts in the week to July 26, the third-largest on record.
Traders estimated that funds have expanded their net short in the days since, leaving the wheat market vulnerable to a short-covering rally. CBOT corn and soyabeans also rebounded after plunges on Tuesday.