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Grain futures - Wheat moves further off 8-month low on short-covering

Published 02/28/2013, 05:53 AM
Investing.com - U.S. grain futures were mostly higher during European morning hours on Thursday, with wheat prices moving further away from an eight-month low hit earlier in the week amid speculation lower prices will boost demand for U.S. supplies.

On the Chicago Mercantile Exchange, wheat for May delivery traded at USD7.1750 a bushel, up 0.8% on the day. The May contract rose by as much as 0.95% earlier in the day to hit a session high of USD7.1862 a bushel.

Prices were higher as investors continued to close out bets that prices would fall further after futures moved into oversold territory.

Wheat traders also sought cheap valuations amid speculation lower prices will boost demand for U.S. supplies.

Wheat prices slumped to USD6.9812 a bushel on Tuesday, the weakest level since June 24 after a second major snowstorm in a week fell in major wheat-growing states across the Great Plains-region, such as Kansas and Oklahoma.

Wheat traders have been closely monitoring weather and crop conditions in the area, where prolonged dryness threatens dormant winter wheat crops.

Meanwhile, corn futures for May delivery traded at USD6.9712 a bushel, up 0.3% on the day. The May contract held in a tight trading range between USD6.9375 a bushel, the daily low and a session high of USD6.9788 a bushel.

Prices continued to draw support from speculation a disruption to supplies from major South American growers Argentina and Brazil will lead to improved demand for U.S. supplies.

Elsewhere, soybeans futures for May delivery traded at USD14.4438 a bushel, up 0.4% on the day. The May contract traded in a range between USD14.3412 a bushel, the daily low and a session high of USD14.4650 a bushel.

Soy’s gains were limited amid indications of improving crop weather in major South American growers Argentina and Brazil.

Argentina's Soybean Belt received more rainfall than expected in recent days, potentially boosting yields and upgrading the quality of the harvest.

Corn is the biggest U.S. crop, followed by soybeans, government figures show. Wheat was fourth, behind hay.

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