Grain Prices Rise on Tough Americas Weather

By FeaturesDow Jones Newswires

Grain futures rose to multimonth highs Monday as concerns about weather across the Americas prompted hedge funds to pull out of bets that prices would fall. Soybean contracts also rose.

Weather forecasts for Argentina turned drier over the weekend, with little rainfall expected over the next two weeks. That would lead to stress for around half of the country's corn-and-soybean belt, the Commodity Weather Group said, with the chance of crop loss increasing over that period.

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Some parts of Brazil were suffering from too much rain, which was delaying fieldwork, while large swathes of the U.S. Plains were hit by a drought.

All this amounted to an increasingly risky outlook for this year's grain and soybean crops. Analysts said that prompted hedge fund managers, who have mostly bet heavily on lower prices in recent months, to scale back those positions--contributing to a bounce on Monday.

"They are buying their way back out of short positions as prices appreciate," said Brian Hoops, president of brokerage Midwest Market Solutions.

The Commodity Futures Trading Commission said on Friday that, as of early last week, fund managers had actually extended their net short in the Chicago wheat market by 2% to 145,408 futures and options contracts from a week earlier. Funds also held short positions in corn and soybean markets, though they had trimmed those.

Wheat futures led gains on Monday, with March-dated contracts rising 1.9% to $4.49 1/4 a bushel at the Chicago Board of Trade. That was the highest close since late September.

March soybean contracts rose 0.6% to $9.91 1/2 a bushel while March corn climbed 0.6% to $3.58 3/4 a bushel, hitting a five-month high.

There were some new signs of global appetite for U.S. crops. The U.S. Department of Agriculture said Monday morning that private exporters sold 115,000 metric tons of corn to Egypt for 2017-18, adding to buying interest in the futures market.

Write to Benjamin Parkin at benjamin.parkin@wsj.com

(END) Dow Jones Newswires

January 29, 2018 15:47 ET (20:47 GMT)

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