By Julie Ingwersen
CHICAGO, May 14 (Reuters) – U.S. wheat futures surged about six percent Thursday morning as a softer dollar and some concern about excess moisture in the Plains inspired funds to cover short positions, analysts said
Corn followed wheat higher while soybeans sagged after a private forecast for record-high U.S. soybean plantings
Wheat’s rise marked the biggest daily move for the most active contract since June 2012. But analysts struggled to find a catalyst, other than commodity funds holding a massive net short position in CBOT wheat
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“Any news that is out there is basically an excuse. There has been some chatter about maybe some export business, but the larger thing is that we have built up record large short positions,” said Arlan Suderman, market analyst with Water Street Solutions
“Particularly with the dollar being weaker, you increase money flow into the broader commodity sector, and you start getting these fund managers saying ‘I am going to take some profits on my big short positions.'”
However there was some fundamental support from rising premiums on high protein wheat in response to concerns about excess moisture in the southern U.S. Plains and forecast for wet weather to continue over the next two weeks, especially in Texas and Oklahoma.
Still, global wheat supplies are more than ample and have been keeping downward pressure on wheat prices.
The dollar fell after downward U.S. producer price data challenged hopes for better U.S. economic growth and supported the view that the U.S. Federal Reserve would delay hiking interest rates
CBOT corn followed wheat higher, despite disappointing weekly U.S. corn export sales of 370,000 tonnes, a low for the current 2014-15 marketing year
Soybeans were sagging after private analytics firm Informa Economics projected U.S. 2015 soybean plantings at 87.2 million acres, a potential record high more than 2.5 million acres above the U.S. Agriculture Department’s current forecast
USDA this week projected that U.S. 2015-16 soy ending stocks would reach 500 million bushels, the most in nine years, based on its plantings forecast of 84.6 million acres. Larger plantings could translate into even bigger stocks
Global soy supplies are also ample. Argentina’s 2014-15 soy production will hit a record 59.6 million tonnes, the Rosario Grains Exchange said on Wednesday
“There is strong (soybean) supply coming from South America and we are seeing demand for U.S. products slow down in Asia,” said Kaname Gokon, general manager of research at brokerage Okato Shoji in Tokyo.
