Grains- wheat and corn rebound after sell-off, soybeans steady

Investing.com - U.S. corn and wheat futures regained strength during European morning trade on Thursday, as the previous day’s steep declines created bargain-buying opportunities for investors reluctant to bet that prices will fall further, while soybeans were largely unchanged after declining for two consecutive sessions.

On the Chicago Mercantile Exchange, corn futures for July delivery traded at USD6.1275 a bushel during European morning trade, adding 0.25%. It earlier rose by as much as 0.35% to trade at a session high of USD6.1388 a bushel.

Thursday’s gains came after prices tumbled almost 3% on Wednesday, the biggest daily drop in almost three months, as agricultural commodities came under selling pressure by broader market risk aversion and prospects of bumper U.S. crops.

But the steep decline triggered some bargain buying from traders reluctant to bet that prices would fall further amid a favorable demand outlook from China.   

Market analysts and industry officials say strong domestic prices in China and low reserves are likely to force the Asian nation to import more U.S. corn this year.

China’s state-owned grain-stockpiling, Sinograin, said recently that the agency is ready boost purchases to replenish depleted state corn reserves if the prices are attractive.

Last week, the U.S. Department of Agriculture said U.S. farmers sold 1.44 million tons to unknown destinations, the biggest one-day sale since December 1994.

While the agency did not confirm the buyer, market participants speculated the bulk of the shipment was headed for China.

The U.S. produced 38% of the world's corn last year, making it the both world's largest corn producing nation and the largest exporter of the grain, while China is the world’s largest consumer of the grain.

Meanwhile, wheat for July delivery traded at USD6.1988 a bushel during European morning trade, jumping 0.9%. It earlier rose by as much as 1% to trade at a daily high of USD6.2013 a bushel. Prices touched USD6.1250 on Wednesday, the lowest since April 18.

Wheat prices plunged more than 4% in the previous session, the most in more than three months, on reports that farmers in Kansas may collect 48.5 bushels of wheat per acre this year. The record yield in Kansas was 49 bushels in 1998, USDA data show.

The findings were reported from Kansas's annual wheat-crop tour, where over 100 wheat experts scrutinize the crops. Kansas is the largest wheat-growing state in the U.S.
 
Elsewhere on the Chicago Board of Trade, soybeans futures for July delivery traded at USD14.8263 a bushel during European morning trade, dipping 0.12%.  

The July soy contract traded in a range between USD14.7713 a bushel, the daily low and a session high of USD14.8850.

Soybean futures touched a four-year high of USD15.1237 a bushel on Wednesday, before turning lower as investors cashed out of the market to lock in gains.

Soybean prices have rallied nearly 20.5% since the beginning of February, and rose almost 6.5% in April, as market sentiment has been dominated by concerns over distressed crops in major South American soy growers and amid indications demand for U.S. soy from top consumer China remains strong.

Corn is the biggest U.S. crop, valued at USD66.7 billion in 2010, followed by soybeans at USD38.9 billion, government figures show. Wheat was fourth at USD13 billion, behind hay.