Corn and wheat futures rose in Chicago amid speculation of buying interest from animal-feed makers and investors after grain prices fell to four-year lows this week.
Corn futures have slumped 25 percent in the past 12 months while wheat fell 19 percent amid expectations for bumper crops to boost supply. World grain stocks will rise to a 15-year high by the end of the 2014-15 season as production of both crops outpaces demand, the International Grains Council forecasts.
"We’ve come to a level where it’s starting to be interesting for buyers," Arnaud Saulais, a broker at Starsupply Commodity Brokers in Nyon, Switzerland, said by phone. "There’s a bit of buyer interest at this moment. It’s always hard to say whether it will resist harvest pressure."
Corn for December delivery climbed 1 percent to $3.855 a bushel on the Chicago Board of Trade by 7:22 a.m. local time. The grain dropped to $3.7825 yesterday, the lowest for a most- active contract since July 2010.
Wheat for September delivery advanced 0.4 percent to $5.40 a bushel, after prices fell to $5.2425 on July 14, also the lowest since July 2010. Milling wheat for November delivery traded on Euronext in Paris rose 1 percent today to 178.75 euros ($242) a metric ton.
Ending stocks of wheat and coarse grains such as corn and barley are predicted to climb to 412 million tons from 400 million tons at the end of 2013-14, the IGC said earlier this month. Inventories will be the highest since the end of the 1999-2000 season, the London-based agency estimates.
Corn’s relative strength index, a gauge of price momentum, was at 19.6 by the close yesterday and wheat was at 28.6. Some analysts view levels below 30 as indicating oversold conditions.
"Grain futures are higher on bargain-hunting and short- covering," Paul Georgy, the president of Allendale Inc., wrote in a market comment, referring to some investors closing bets on falling prices. "Bargain-hunters are stepping in and buying corn and soybeans."
Soybeans for November delivery climbed 0.7 percent to $10.94 a bushel in Chicago. Prices fell to $10.65 on July 11, the lowest since October 2010.
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