U.S. Grains, Soybeans Inch Higher As Oil Jumps
13 February 2016 - 4:29AM
Dow Jones News
By Jesse Newman
CHICAGO--U.S. grain and soybean futures posted modest gains as
crude oil prices rallied and traders squared positions ahead of the
long weekend.
Corn prices rose, buoyed by surging prices for crude oil, which
rose 10% on Friday. Higher oil prices often provide a lift to corn
and soybean markets, as they encourage refiners to blend
alternative fuels--like corn-based ethanol and soybean-based
biodiesel--into U.S. supplies of gasoline and diesel.
Trader positioning ahead of the long weekend also boosted corn
prices. Investors often exit bearish bets prior to an extended
pause in trade in order to minimize risk in case of a major
political or macroeconomic event.
"It's a wishy-washy time right now," said Terry Linn, executive
vice president at Chicago commodity futures-trading firm and asset
manager Linn Group. "There's just not a lot of news to drive the
markets."
Corn futures for March rose 1 1/4 cents, or 0.4%, to $3.61 1/2 a
bushel at the Chicago Board of Trade.
Soybean prices nudged higher, bolstered by sharp gains in the
energy markets. Analysts said rising soybean oil prices also
propped up the prices for the oilseeds. Prices for soybean oil
gained 0.7% on Friday, benefiting from higher prices for rival palm
oil, which have increased thanks to lower-than-expected output in
Malaysia.
"El Nino has hurt production in the palm market in the far east,
which has been a big driver" of soybean oil prices, said Mr.
Linn.
Still, soybean prices were pressured by crop-friendly weather in
South America, a major U.S. rival for soybean production and
export. The advancing soybean harvest there also weighed on prices
for the oilseeds, with farmers reporting better yields as they
fieldwork progresses.
CBOT March soybeans added 1/2 cent, or 0.03%, to $8.73 3/4 a
bushel.
Wheat prices inched upward, supported by signs of world demand
for the grain and concerns over winterkill in the Black Sea region,
where dropping temperatures could harm dormant wheat plants not
sufficiently insulated by the snow. Egypt, the world's largest
wheat buyer, bought 60,000 metric tons of Romanian wheat on Friday,
indicating the country's continued need for supplies.
Uncertainty over Egypt's standards on the potentially dangerous
ergot fungus still is hampering the wheat trade, however, with many
regular suppliers declining to make offers in the international
tender due to concerns over Egypt's quality-control standards.
CBOT March wheat moved upward by 1/2 cent, or 0.1%, to $4.58 3/4
a bushel.
Write to Jesse Newman at jesse.newman@wsj.com
(END) Dow Jones Newswires
February 12, 2016 12:14 ET (17:14 GMT)
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