(Reuters) – U.S. soy, corn up 0.7 pct; wheat rises 0.9 pct
* Argentine corn suffers, rains may not be enough
* USDA report seen cutting Argentine corn harvest
* Technicals: Soy to end rebound about $12.13
By Naveen Thukral
SINGAPORE, Jan 9 (Reuters) – U.S. corn rose 0.7
percent on Monday, while soybeans recovered after two straight
sessions of losses with harsh hot and dry weather threatening to
curb crop-yields in Argentina, a top global supplier of grains
and oilseeds.
Wheat gained 0.9 percent, ending a three-day losing streak,
as it tracked gains in corn, which is widely being replaced by
wheat in animal feed rations across the world.
Investors will focus on the U.S. Department of Agriculture
report on global supply and demand of farm products, widely
expected to slash forecast for South American crops.
“We are looking at sideways trade because of the USDA report
this week with an upside bias on weather concerns in South
America,” said Lynette Tan, analyst with Phillip Futures in
Singapore.
“USDA data is likely to be bullish for corn prices, however,
we do not see a sharp upside, March contract should be trading
in a range of $6.20 to $6.60 a bushel.”
Chicago Board of Trade March soy rose 0.7 percent to
$12.04-1/2 a bushel by 0333 GMT and corn for March gained
0.7 percent to $6.48-1/4 a bushel. March wheat added 0.9
percent to $6.30-1/2 a bushel.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
POLL:Estimates for U.S. grain ending stocks
POLL:Estimates for US quarterly grain stocks
POLL:US corn production seen 12.265 bln bu
POLL:Estimates for global grain stocks
POLL:Estimates for US winter wheat acreage
POLL:Argentine corn crop seen shrinking
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
The gains in corn, soybean and wheat futures came despite
renewed concerns over the European debt crisis weighing on
global markets.
The euro sank against the dollar and the yen and Asian
stocks stalled on Monday, as gloom about the fallout from the
European sovereign debt crisis overshadowed signs of vigour in
the U.S. economy.
The dollar index, which measures the strength of the
greenback against a basket of currencies, rose 0.2 percent. A
stronger dollar makes U.S. commodities expensive for overseas
buyers.
Traders are paying close attention to Argentina’s weather
because some of the corn crop is in the critical pollination
stage of development. They project export demand may shift to
the United States if South American farmers suffer serious crop
losses due to dryness.
Argentina is the world’s largest exporter of soymeal and
soyoil. It is the second largest supplier of corn.
Even though key growing areas of Argentina will likely
receive much need rains this week, analysts say showers may not
be enough.
“There are expectations of rains this week in Argentina but
in the longer term it will still be dry because of the La Nina
weather impact, which is bullish for corn,” said Tan.
The market has, to a large extent, priced in the expected
damage to Argentina’s corn crop up until this point, analysts
said, adding that the USDA would have to slash its forecast for
prices to rally on Thursday when the reports are issued.
A Reuters poll of 14 analysts showed them expecting
Argentina’s corn crop to average 25.808 million tonnes, down 11
percent from the USDA’s December estimate of 29 million.
But the range of estimates from the analysts was wide, from
a high of 27.5 million tonnes to 22 million, reflecting the
divide in their individual assessments of the damage.
Traders will also focus on supply-demand data for the United
States, the world’s top exporter of corn, soybeans and wheat,
looking at the quarterly stocks data as of Dec. 1, for evidence
of actual demand for grains.
There has been a debate over whether the USDA had
understated corn used for feed in the United States in the
2011/12 season ending Aug. 31 next year.
Some traders are expecting the USDA reports to show a higher
quantity of wheat used to feed livestock after the department
left that number unchanged at 160 million bushels in its
December supply-demand report.
Prices at 0333 GMT
Contract Last Change Pct chg Two-day chg MA 30 RSI
CBOT wheat 630.50 5.75 +0.92% +0.20% 615.40 52
CBOT corn 648.25 4.75 +0.74% +0.74% 612.91 67
CBOT soy 1204.50 8.00 +0.67% -0.37% 1158.72 59
CBOT rice $14.74 $0.06 +0.41% +1.41% $14.43 62
WTI crude $101.05 -$0.51 -0.50% -0.75% $99.19 56
Currencies
Euro/dlr $1.269 $0.000 +0.00% -0.22%
USD/AUD 1.016 -0.004 -0.35% -0.65%
Most active contracts
Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight
RSI 14, exponential
(Reporting by Naveen Thukral; Editing by Sugita Katyal)
