(Reuters) – Chicago wheat edged higher on Monday, recouping some of last session’s losses, on fears of crop damage from bitter cold across the U.S. grain belt.
Soybean futures were little changed, hovering around a three-week low as the market remained under pressure from improving crop outlooks in Brazil and Argentina, while corn dipped after gaining in the past four sessions on strong demand.
Chicago Board of Trade wheat had risen 0.3 percent to $5.67 a bushel by 0247 GMT, while March soybeans were almost unchanged at $12.84-1/4 a bushel after dropping to their lowest since Jan. 2 on Friday.
March corn lost 0.2 percent to $4.28-3/4 a bushel after making modest gains in the last four sessions.
“The incoming South American soybean harvest is spurring expectations that there could be a shift in demand from U.S. to South American soybeans,” said Vanessa Tan, investment analyst at Phillip Futures in Singapore.
“For wheat, very harsh and cold conditions continue in the U.S., raising concerns that the weather could damage the U.S. wheat crop.”
Temperatures plunged to the single digits below zero Fahrenheit across the northern Midwest and Plains, and colder conditions are expected this week.
Corn export premiums on the U.S. Gulf Coast were steady to higher on Friday on strong demand as U.S. prices were at a discount to most major exporters, traders said.
The soybean market is facing headwinds from forecasts of record production Brazil. The country’s 2013/14 crop is seen at an all-time high of 91.8 million tonnes, up 12 percent from the 2012/13 harvest, said crop analysts Safras & Mercado.
Shipping data showed buyers are already shifting their purchases to the South American nation.
Brazil’s soy exports will likely set a new high for the month of February due to strong demand and early harvesting of a record crop, ship lineups show. Data compiled by Santos-based shipping agents SA Commodities shows there are some 650,000 tonnes of soy scheduled for shipment in late January and 2.5 million tonnes slated for loading in February.
Large speculators trimmed their net short position in CBOT corn futures in the week to Jan. 21, regulatory data released on Friday showed.
The Commodity Futures Trading Commission’s weekly commitments of traders report also showed that noncommercial traders, a category that includes hedge funds, trimmed their net short position in CBOT wheat and raised their net long position in soybeans.
Meanwhile, CME Group is considering a proposal to reset daily price limits for U.S. grain and oilseed futures twice a year based on underlying price levels in agricultural markets, documents distributed by the exchange operator show.
The proposal would allow higher price limits when market prices are high and lower price limits when market prices are low, according to a CME fact sheet sent to market participants and obtained by Reuters.
