- Corn up 2.5 pct in biggest 1-day gain in a month, soy rises
- USDA cuts ending stocks outlook, funds continue to buy
Adds comment, detail
By Naveen Thukral
SINGAPORE, June 13 (Reuters) – U.S. corn rallied 2.5 percent on Monday and soybeans gained almost 1 percent, with prices supported by concerns over a severe drought in Brazil and unseasonal rains in Argentina curbing global supplies.
Wheat rose, tracking gains in corn and soybeans, although prices were capped by expectations of a bumper harvest of the U.S. winter crop.
“Funds are continuing with their bullish bets on corn and soybean markets,” said Kaname Gokon at brokerage Okato Shoji in Tokyo.
“The USDA has cut its estimates for ending stocks as there is strong demand for U.S. products.”
The Chicago Board of Trade most-active corn contract Cv1 was up 2.5 percent at $4.33-1/2 a bushel by 0217 GMT, its biggest one-day gain since mid-May. Soybeans Sv1 added 0.9 percent to $11.88-3/4 a bushel.
Wheat Wv1 rose 0.7 percent to $4.98-1/2 a bushel.
Agricultural markets have been showing bullish momentum since April as a severe drought has hit Brazilian corn production, while heavy rains have swamped Argentina’s soybean crop.
Domestic supplies of corn and soybeans will be tighter than expected in the United States as problems with crops in Brazil and Argentina have raised demand for U.S. supplies from overseas buyers, the U.S. Department of Agriculture said on Friday.
In its monthly supply and demand report, the government cut its new-crop and old-crop ending stocks outlooks for both corn and soybeans by more than analysts had forecast.
For corn, the USDA said U.S. ending stocks for 2015/16 would be 1.708 billion bushels, down from its May outlook for 1.803 billion bushels. It lowered its 2016/17 corn end stocks view to 2.008 billion bushels from 2.153 billion bushels.
Old-crop soybean stocks were cut to 370 million bushels from 400 million bushels. New-crop soy stocks were lowered to 260 million bushels from 305 million bushels.
The market will focus now on what the USDA will say on June 30, when it releases its estimates for U.S. quarterly grain stocks and planted acres. It will also keep a close eye on the weather that could threaten recently planted U.S. corn and soybean crops.
Large speculators raised their net long position in CBOT corn futures in the week to June. 7, regulatory data released on Friday showed.
The Commodity Futures Trading Commission’s weekly commitments of traders report also showed that noncommercial traders, a category that includes hedge funds, trimmed their net short position in CBOT wheat and raised their net long position in soybeans.
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