Wheat rises as supply concerns trigger short-covering
Recasts with European trade, adds new comment, changes dateline
By Michael Hogan
HAMBURG, July 22 (Reuters) -Chicago wheat rose on Monday as concern over U.S. and French crops triggered short-covering, lifting prices from last week's four-month lows.
Soybeans and corn gained but remained near recent four-year lows after favourable crop weather in the U.S. Midwest had supported expectations of plentiful U.S. harvests.
The Chicago Board of Trade's most active wheat contract Wv1 rose 0.8% to $5.47-1/4 a bushel by 1028 GMT, having hit a four-month low last week at $5.25-1/4.
Soybeans Sv1 rose 1.9% to $10.56-1/4 a bushel, compared with last week's low of $10.31-3/4. Corn Cv1 up 1.7% at $4.11-3/4 a bushel, recovering from the June 28 low of $3.99-1/2.
“Wheat is supported by concerns about weather in the U.S. Midwest ahead of the U.S. Department of Agriculture crop progress report later on Monday,” said StoneX commodity risk manager Matt Ammermann.
“There is also worry about rain delaying the European harvest, especially in France, with some expectations this could generate import demand for U.S. wheat from the EU and Britain.”
French soft wheat crop conditions fell sharply last week to an eight-year low, with harvesting well behind usual progress.
Consultancy IKAR cut its forecast for Russia's 2024 grain harvest on Friday.
Plentiful supply has prompted speculators to build net short positions in all three contracts, especially soybeans, leaving them vulnerable to short-covering.
“Corn and soybeans are seeing some short-covering support today,” Ammermann said. "I feel some of this short-covering relates to political uncertainty after the decision by President Joe Biden to pull out of the U.S. election race.
“Rain and non-stressful temperatures forecast in the Midwest are non-threatening to corn and soybeans. There is market talk China could be more active about inquires for U.S. soybean purchases.”
Reporting by Michael Hogan in Hamburg
Additional reporting by Peter Hobson in Canberra
Editing by Rashmi Aich, Mrigank Dhaniwala and David Goodman
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