Mon Aug 20, 2012
* Corn up 0.7 pct, soy rises 0.2 pct, wheat down
* Tightening supplies drive U.S. corn, soybeans
* Black Sea supply concerns underpin wheat
* Coming Up: USDA weekly crop progress report
By Naveen Thukral
SINGAPORE, Aug 20 (Reuters) - Chicago corn rose to its highest in more than a week on Monday, resuming its rally on supply concerns arising from the U.S. grain belt's worst drought in 56 years, while soybeans ticked up ahead of the government's weekly crop report.
Wheat edged lower as the market took a breather after gaining for three straight sessions on fears of tightening global supplies and expectations of curbs on exports from the Black Sea region.
"The issues out of Russia are certainly significant for the wheat market as at the current pace of exports they are likely to exhaust their surplus by around Christmas time," said Luke Mathews, a commodities strategist at the Commonwealth Bank of Australia.
"But we continue to favour corn over wheat as most significant supply tightness in the global grains market is certainly within the corn market."
Chicago Board of Trade new-crop December corn rose 0.7 percent to $8.13-1/4 a bushel by 0330 GMT, after touching a high of $8.14 a bushel, highest since Aug. 10. November soybeans rose 0.2 percent to $16.49 per bushel, while September wheat slid 0.2 percent to $8.73 per bushel.
The U.S. Department of Agriculture has cut 2012/13 U.S. corn crop forecast by 4.011 billion bushels, or 27 percent, over the past two months. As a result, U.S. inventories at the end of next summer are now expected to fall to 650 million bushels, a 17-year low and considered near the bare minimum required to
prevent an unprecedented scramble for the last kernels.
More recently, the wheat market has rallied on expectations of curbs on exports from the Black Sea region.
Russian Agriculture Minister Nikolai Fyodorov on Friday ruled out a grain export ban but did not exclude "pinpoint interventions" to influence exports.
Any effort by drought-stricken Russia to restrict grain exports is likely to provoke a similar move by neighboring Ukraine, leaving markets bereft of supply from two major Black Sea producers at a time when dry weather has slashed grain supply from India to Indiana.
In 2010, Russia banned exports after a severe drought devastated its wheat crop, boosting Chicago wheat futures about 80 percent that summer to peak at $8.41 per bushel.
In addition, the wheat crop in Australia, the world's No 2 exporter, is being threatened by dry weather, although there is still time left before farmers begin the harvest in November.
Chicago's corn and soybean markets will be monitoring the annual exercise this week when fund managers, crop forecasters, analysts and others in the grain industry begin assessing the quality of the corn and soybean crops, which have been devastated by the drought.
Still, the soybean crop in some late-planted areas could benefit from rains in parts of the Midwest.
Showers brought 1.0 inch to 1.5 inches of rain to the central Midwest on Thursday last week, and up to 2.5 inches in west-central Indiana. Forecasts called for dry conditions to return, although temperatures should be seasonal.
"Weather is the U.S. has certainly improved a touch over the last couple of weeks," said Mathews. "We wouldn't be surprised to see another very modest uptick in the weekly ratings by the USDA tonight."
Prices at 0330 GMT
Contract Last Change Pct chg MA 30 RSI
CBOT wheat 893.00 -1.50 -0.17% 874.18 52
CBOT corn 813.25 6.00 +0.74% 769.02 57
CBOT soy 1649.00 3.25 +0.20% 1585.51 53
CBOT rice $15.41 -$0.01 -0.10% $15.48 45
WTI crude $96.29 $0.28 +0.29% $89.19 80
Currencies
Euro/dlr $1.233 $0.004 +0.36%
USD/AUD 1.044 -0.011 -1.06%
Most active contracts
Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight
RSI 14, exponential
(Editing by Himani Sarkar)
* Corn up 0.7 pct, soy rises 0.2 pct, wheat down
* Tightening supplies drive U.S. corn, soybeans
* Black Sea supply concerns underpin wheat
* Coming Up: USDA weekly crop progress report
By Naveen Thukral
SINGAPORE, Aug 20 (Reuters) - Chicago corn rose to its highest in more than a week on Monday, resuming its rally on supply concerns arising from the U.S. grain belt's worst drought in 56 years, while soybeans ticked up ahead of the government's weekly crop report.
Wheat edged lower as the market took a breather after gaining for three straight sessions on fears of tightening global supplies and expectations of curbs on exports from the Black Sea region.
"The issues out of Russia are certainly significant for the wheat market as at the current pace of exports they are likely to exhaust their surplus by around Christmas time," said Luke Mathews, a commodities strategist at the Commonwealth Bank of Australia.
"But we continue to favour corn over wheat as most significant supply tightness in the global grains market is certainly within the corn market."
Chicago Board of Trade new-crop December corn rose 0.7 percent to $8.13-1/4 a bushel by 0330 GMT, after touching a high of $8.14 a bushel, highest since Aug. 10. November soybeans rose 0.2 percent to $16.49 per bushel, while September wheat slid 0.2 percent to $8.73 per bushel.
The U.S. Department of Agriculture has cut 2012/13 U.S. corn crop forecast by 4.011 billion bushels, or 27 percent, over the past two months. As a result, U.S. inventories at the end of next summer are now expected to fall to 650 million bushels, a 17-year low and considered near the bare minimum required to
prevent an unprecedented scramble for the last kernels.
More recently, the wheat market has rallied on expectations of curbs on exports from the Black Sea region.
Russian Agriculture Minister Nikolai Fyodorov on Friday ruled out a grain export ban but did not exclude "pinpoint interventions" to influence exports.
Any effort by drought-stricken Russia to restrict grain exports is likely to provoke a similar move by neighboring Ukraine, leaving markets bereft of supply from two major Black Sea producers at a time when dry weather has slashed grain supply from India to Indiana.
In 2010, Russia banned exports after a severe drought devastated its wheat crop, boosting Chicago wheat futures about 80 percent that summer to peak at $8.41 per bushel.
In addition, the wheat crop in Australia, the world's No 2 exporter, is being threatened by dry weather, although there is still time left before farmers begin the harvest in November.
Chicago's corn and soybean markets will be monitoring the annual exercise this week when fund managers, crop forecasters, analysts and others in the grain industry begin assessing the quality of the corn and soybean crops, which have been devastated by the drought.
Still, the soybean crop in some late-planted areas could benefit from rains in parts of the Midwest.
Showers brought 1.0 inch to 1.5 inches of rain to the central Midwest on Thursday last week, and up to 2.5 inches in west-central Indiana. Forecasts called for dry conditions to return, although temperatures should be seasonal.
"Weather is the U.S. has certainly improved a touch over the last couple of weeks," said Mathews. "We wouldn't be surprised to see another very modest uptick in the weekly ratings by the USDA tonight."
Prices at 0330 GMT
Contract Last Change Pct chg MA 30 RSI
CBOT wheat 893.00 -1.50 -0.17% 874.18 52
CBOT corn 813.25 6.00 +0.74% 769.02 57
CBOT soy 1649.00 3.25 +0.20% 1585.51 53
CBOT rice $15.41 -$0.01 -0.10% $15.48 45
WTI crude $96.29 $0.28 +0.29% $89.19 80
Currencies
Euro/dlr $1.233 $0.004 +0.36%
USD/AUD 1.044 -0.011 -1.06%
Most active contracts
Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight
RSI 14, exponential
(Editing by Himani Sarkar)
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