CHICAGO- US corn futures jumped 3.7 percent on Friday, more than recovering from the prior day’s 3.1 percent drop, buoyed by a mix of short-covering and expectations of increased export demand for US supplies, traders and analysts said.
Wheat and soybeans followed the firm trend.
Chicago Board of Trade March corn rose 13-3/4 cents, its biggest single-day move since October, to settle at $3.89-1/4 per bushel. CBOT March wheat ended up 5-1/4 cents at $5.70-1/2 a bushel and March soybeans rose 5-3/4 cents to finish at $9.29-3/4.
Corn futures rebounded a day after the March contract fell to a one-month low as doubts about the scale of Chinese purchases of US crops under the trade agreement signed in Washington this week triggered a round of selling.
The mood changed on Friday as the price break inspired fresh interest from bargain-hunters that could include exporters, speculators holding short positions and domestic users such as cattle and hog feeders.
“It definitely looks like bargain-buying going on. The funds supposedly have bought like 15,000 (CBOT corn futures) contracts,” said Jack Scoville, analyst with the Price Futures Group in Chicago, who added that farmer corn offerings were thin.
“There is no real selling. The producer is pissed off after (the sell-off) yesterday,” Scoville said.
US corn is competitive globally, analysts said, and a South Korean feed association bought about 66,000 tons of optional-origin corn overnight.
Traders continued to mull the implications of this week’s US-China trade pact. In the long-anticipated conclusion of a Phase 1 trade deal with Washington on Wednesday, Beijing committed to increase purchases of US farm products by $32 billion over two years.
However, China’s pledge to buy US agricultural goods based on “market conditions” fueled skepticism that the targets could be met.
“Some people are just trying to work in this idea that China will resume buying US commodities that they have not really been focused on for a while,” said Terry Reilly, senior analyst with Futures International in Chicago. — Reuters
