Chicago wheat up sharply on short covering, soybean down

GMT 05:31 2015 Friday ,15 May

Arab Today, arab today Chicago wheat up sharply on short covering, soybean down

Chicago wheat
Chicago - XINHUA

Chicago Board of Trade (CBOT) wheat settled up sharply Thursday on short covering, corn followed suit while soybean came down slightly on weaker export data.

The most active corn contract for July delivery added 5.75 cents, or 1.59 percent, to close at 3.68 U.S. dollars per bushel.

Wheat for July delivery rose 32.75 cents, or 6.8 percent, to close at 5.1425 dollars per bushel. July soybeans lost 0.25 cent, or 0. 03 percent, to close at 9.57 dollars per bushel. Analysts said wheat gained a lot Thursday mainly on short covering.

The surprise has been the big surge of U.S. wheat futures, said Agresource, a Chicago-based research Institute. It added that CBOT floor brokers estimated that funds have bought 15, 000 contracts of wheat before midday.

Short covering on the market was attributed to concerns on climate and weaker dollar by some analysts. U.S. National Weather Service's Climate Prediction Center said in its monthly report Thursday that El Nino, a phenomenon which warms sea-surface temperatures in the Pacific, had a 90 percent likelihood to last through the Northern Hemisphere summer.

Some analysts noted that EL Nino last appeared in 2009-2012 resulted significant spike in wheat price.

The weaker dollar also helped trigger short covering, said analysts.

What's more, they said, weaker export data gave further support to wheat, as U.S. weekly export sales report released by U.S. Department of Agriculture (USDA) said for delivery in the period of May 1-7 of marketing year 2014/2015, net sales of wheat was 115, 400 metric tons, noticeably up from the previous week and from the prior four-week average.

Corn followed wheat and went higher Thursday. CBOT floor brokers reported that funds have bought 9,000 contracts of corn before midday, according to Agresource. The same USDA report said net sales of corn was 370,000 metric tons, down 56 percent from the previous week and 53 percent from the prior 4-week average, also a marketing year low.

As for soybeans, the report said the net sales of 136,600 metric tons were down 60 percent from the previous week and 54 percent from the prior 4-week average. Analyst believe this brought some bearish tone for soybeans. CBOT floor brokers reported that funds sold 1,500 contracts of soybeans in the morning.

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