Grain futures - Corn, wheat rally to multi-week highs

Investing.com - U.S. grain futures were broadly higher on Wednesday, with corn and wheat extending a recent rally that took prices to multi-week highs as sentiment on the grains complex continued to be underpinned following last week’s bullish U.S. government supply report.

On the Chicago Mercantile Exchange, corn futures for March delivery traded at USD7.3338 a bushel, up 0.4% on the day.

The March contract rose by as much as 0.6% earlier in the session to hit a daily high of USD7.3488 a bushel, the strongest level since December 10.

Prices of the grain have been on an uptrend since last Friday’s upbeat U.S. Department of Agriculture report, which pegged the U.S. corn stockpile on December 1 at 8.03 billion bushels, down 17% from a year earlier and the smallest for that date since 2003.

Inventories at the end of the crop's marketing year on August 31 were projected to total 602 million bushels, a 17-year low.

The U.S. corn harvest will total 10.78 billion bushels, down from 12.36 billion collected in 2011 and the lowest in six years.

Corn future prices have gained nearly 8% since falling to a six-month low of USD6.7812 a bushel on January 7, as traders bet weaker prices will increase demand for U.S. supply.

Meanwhile, wheat for March delivery traded at USD7.8838 a bushel, up 0.65%. The March contract rose by as much as 0.9% earlier to hit a session high of USD7.9062 a bushel, the strongest since December 26.

Sentiment on the grain remained upbeat after the USDA cut its forecasts for U.S. wheat reserves at the end of the crop's current marketing year on May 31 to a four-year low of 716 million bushels, 5% lower than the agency’s December estimate.

Government data also showed that U.S. farmers planted 41.82 million acres of wheat, 2% below analysts’ expectations.

Wheat futures are up approximately 7% since dropping to a six-month trough of USD7.3637 a bushel on January 11, as hedge funds and large institutional investors returned to the market amid speculation prices have bottomed out.

Elsewhere, soybeans futures for March delivery traded at USD14.2212 a bushel, up 0.6% on the day. The March contract rose by as much as 0.7% earlier to hit a daily high of USD14.2462 a bushel.

Soy prices rallied to a two-week high of USD14.3562 a bushel on Tuesday, boosted by indications of robust demand for U.S. supplies of the oilseed.

The U.S. Department of Agriculture said earlier in the week that U.S. farmers sold 120,000 metric tons of soybeans to China for delivery during the 2012-13 marketing year. China is the world’s largest soybean consumer.

Meanwhile, the National Oilseed Processors Association said that 159.9 million bushels of soybeans were crushed in December, the second largest on record for the month.  

The September-through-December NOPA crush totals 590.4 million bushels, up 10% from a year ago.

Corn is the biggest U.S. crop, followed by soybeans, government figures show. Wheat was fourth, behind hay.