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Chicago agricultural commodities settle higher on short-covering

Xinhua, October 14, 2016 Adjust font size:

Chicago Board of Trade (CBOT) grains futures close higher Thursday, with wheat futures jumping about 5 percent as a flurry of export deals prompted funds to cover short positions.

The most active corn contract for December delivery rose 12.5 cents, or 3.71 percent, to 3.495 dollars per bushel. December wheat delivery added 19.25 cents, or 4.85 percent, to 4.16 dollars per bushel. November soybeans rose 10.75 cents, or 1.14 percent, to 9.5625 dollars per bushel.

Wheat posted the biggest advance on a percentage basis. The December contract reached six-week high, and surpassed its 50-day moving average, a bullish technical signal.

Commodity funds held a historically large net short position in CBOT wheat as of Oct. 4, leaving the market vulnerable to short-covering rallies.

Also, export business picked up in the last day, with Saudi Arabia and Egypt both announcing plans to buy wheat. Algeria announced a purchase tender earlier this week, and Syria struck a deal to purchase 1 million tonnes of Russian wheat.

Short-covering also lifted corn, along with strength in the domestic cash market. As the U.S. harvest nears the halfway point, farmers generally have been selling soybeans but storing their corn, holding out for higher prices.

Soybeans rallied from early declines, following strength in corn and wheat as well as in crude oil. A softer U.S. Dollar index added support to commodities, making U.S. Goods more attractive on the global market. Endit