October 25, 2016 / 7:17 PM / 2 years ago

GRAINS-U.S. wheat, corn gain on short-covering after 1-week lows

(New throughout, updates U.S. market activity to close, adds analyst comments; changes byline, dateline, previous PARIS/SINGAPORE)

By Michael Hirtzer

CHICAGO, Oct 25 (Reuters) - U.S. wheat and corn futures were narrowly higher on Tuesday as traders covered short positions after prices for each crop fell to the lowest levels in more than a week.

The dollar reversed lower after a nine-month high against a basket of currencies, further underpinning grain prices, as a weaker dollar makes U.S. goods more attractive in global markets.

Grain traders were awaiting tender results from top global wheat buyer Egypt, which was seeking wheat for Dec. 1-10 shipment. Egypt has bought most of its wheat needs from Russia in recent weeks.

Cargill Inc offered 55,000 tonnes of U.S. soft red or hard red winter wheat, amongst 10 offers for Russian and Romanian wheat, traders said.

“Wheat futures found support on reports on one cargo of U.S. wheat being offered to Egypt in their latest tender,” said analyst Dan Cekander of DC Analysis LLC.

Cekander added that even if Egypt does not buy wheat from the United States, the offer was competitively priced with other origins, showing that U.S. was closer to finding the export demand needed to draw down large domestic wheat stocks.

Chicago Board of Trade December wheat futures settled 1-3/4 cents higher at $4.04-1/4 per bushel. CBOT December corn gained 1 cent to $3.49-1/4 per bushel, rising after U.S. Department of Agriculture data showed the U.S. corn harvest slightly behind the average pace.

Soybean futures traded in a wide trading range, losing as much as 10 cents per bushel before finishing nearly flat. The November soybean contract finished 1-1/4 cents lower at $9.90-3/4 per bushel.

Soybean prices fell early in the session, declining in part due to pressure from a steep drop in Malaysian palm oil futures. But soybeans rallied after the U.S. Department of Agriculture at midmorning said China bought 516,000 tonnes of U.S. soybeans.

“We came in a little bit on the defensive with the palm oil down overnight but that 516,000-tonne sale firmed things up,” Ed Duggan, senior risk manager at Top Third Ag Marketing, said of soybean futures.

Brazilian exporters last week signed deals for four soybean shipments for delivery to China in November and December, before the new crop is harvest early in 2017 in South America, trading sources said.

Additional reporting by Naveen Thukral in Singapore and Gus Trompiz in Paris; Editing by Dan Grebler

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