Thu Nov 8, 2012
* Wheat falls 0.6 pct after three days of gains
* Global supply concerns to underpin wheat prices
* Soy down for 2nd day, S.America weather weighs
By Naveen Thukral
SINGAPORE, Nov 8 (Reuters) - U.S. wheat slid 0.6 percent on Thursday as the market took a breather after climbing for three consecutive sessions to a five-week top on concerns over global supplies as dryness hurts U.S. crops and rains threaten the Australian harvest.
Soy lost more ground to trade near its lowest since mid-October, with expectations of higher supplies from the United States and favourable crop weather in South America weighing on the market.
The market is expecting the U.S. Department of Agriculture to cut its estimates for global wheat production and increase its forecast for U.S. soybean supplies in its monthly report due on Friday.
"We have seen cash wheat markets strengthen because of quality concerns in Australia, Brazil and Argentina," said Brett Cooper, a senior markets manager at INTL FCStone Australia.
"There is a view that these quality issues in the southern hemisphere will switch demand to the United States."
Chicago Board of Trade December wheat fell 0.6 percent to $8.88-1/4 a bushel by 0312 GMT, after climbing to $8.97 a bushel on Wednesday, the highest since October 1.
November soy slid 0.4 percent to $15.03-1/4 a bushel, not far from Wednesday's three week low of $15.00-1/4 a bushel and December corn lost 0.4 percent to $7.41-1/4 a bushel.
Analysts were expecting the USDA's new view of global stocks to fall to 170.969 million tonnes from 173 million, according to the average of estimates in a Reuters survey.
The USDA cut its estimate of world wheat stocks, which were 198.17 million tonnes at the end of the 2011/12 crop year, by 3.71 million in its October report.
The International Grains Council has already cut its forecast for grain stocks at the end of the 2012/13 season by 4 million tonnes to 328 million, representing a fall of 44 million tonnes, or 12 percent, from year-earlier levels.
Australia, the world's second largest exporter, is expecting a much smaller crop this year, with early harvest showing lower protein scales and poor yields.
Traders said rains forecast over the nation's east coast could slow the harvest.
Asia's top buyers, who rely on Australia for the bulk of their milling wheat supplies, may be forced to import larger volumes of high-protein spring wheat from the United States and Canada.
Speculative funds held a net short position on wheat futures, which left prices prone to rallies as the noncommercial traders covered those bearish bets. Wheat was also seen as a bargain due to weakness in the commodity compared to soybeans and corn in recent months.
In the soybean market, the USDA is expected to again boost the size of this year's soybean crop as harvest results around the U.S. Midwest showed that damage from the worst drought in more than 50 years was not as bad as initially feared.
Favorable crop weather continues in southern Brazil, with drier weather for the next 10 days boosting plantings, and northern Brazil continues to get needed rainfall.
Commodity funds bought 6,000 CBOT corn contracts on Wednesday, trade sources said. They sold 3,000 soybean contracts and bought 5,000 wheat.
Prices at 0312 GMT
Contract Last Change Pct chg MA 30 RSI
CBOT wheat 888.25 -5.75 -0.64% 874.02 63
CBOT corn 741.25 -3.00 -0.40% 766.62 44
CBOT soy 1502.75 -4.25 -0.28% 1580.63 35
CBOT rice $15.30 $0.08 +0.49% $15.48 52
WTI crude $84.84 $0.40 +0.47% $88.81 41
Currencies
Euro/dlr $1.275 $0.046 +3.78%
USD/AUD 1.041 -0.014 -1.34%
Most active contracts
Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight
RSI 14, exponential
(Reporting by Naveen Thukral; Editing by Clarence Fernandez)
* Wheat falls 0.6 pct after three days of gains
* Global supply concerns to underpin wheat prices
* Soy down for 2nd day, S.America weather weighs
By Naveen Thukral
SINGAPORE, Nov 8 (Reuters) - U.S. wheat slid 0.6 percent on Thursday as the market took a breather after climbing for three consecutive sessions to a five-week top on concerns over global supplies as dryness hurts U.S. crops and rains threaten the Australian harvest.
Soy lost more ground to trade near its lowest since mid-October, with expectations of higher supplies from the United States and favourable crop weather in South America weighing on the market.
The market is expecting the U.S. Department of Agriculture to cut its estimates for global wheat production and increase its forecast for U.S. soybean supplies in its monthly report due on Friday.
"We have seen cash wheat markets strengthen because of quality concerns in Australia, Brazil and Argentina," said Brett Cooper, a senior markets manager at INTL FCStone Australia.
"There is a view that these quality issues in the southern hemisphere will switch demand to the United States."
Chicago Board of Trade December wheat fell 0.6 percent to $8.88-1/4 a bushel by 0312 GMT, after climbing to $8.97 a bushel on Wednesday, the highest since October 1.
November soy slid 0.4 percent to $15.03-1/4 a bushel, not far from Wednesday's three week low of $15.00-1/4 a bushel and December corn lost 0.4 percent to $7.41-1/4 a bushel.
Analysts were expecting the USDA's new view of global stocks to fall to 170.969 million tonnes from 173 million, according to the average of estimates in a Reuters survey.
The USDA cut its estimate of world wheat stocks, which were 198.17 million tonnes at the end of the 2011/12 crop year, by 3.71 million in its October report.
The International Grains Council has already cut its forecast for grain stocks at the end of the 2012/13 season by 4 million tonnes to 328 million, representing a fall of 44 million tonnes, or 12 percent, from year-earlier levels.
Australia, the world's second largest exporter, is expecting a much smaller crop this year, with early harvest showing lower protein scales and poor yields.
Traders said rains forecast over the nation's east coast could slow the harvest.
Asia's top buyers, who rely on Australia for the bulk of their milling wheat supplies, may be forced to import larger volumes of high-protein spring wheat from the United States and Canada.
Speculative funds held a net short position on wheat futures, which left prices prone to rallies as the noncommercial traders covered those bearish bets. Wheat was also seen as a bargain due to weakness in the commodity compared to soybeans and corn in recent months.
In the soybean market, the USDA is expected to again boost the size of this year's soybean crop as harvest results around the U.S. Midwest showed that damage from the worst drought in more than 50 years was not as bad as initially feared.
Favorable crop weather continues in southern Brazil, with drier weather for the next 10 days boosting plantings, and northern Brazil continues to get needed rainfall.
Commodity funds bought 6,000 CBOT corn contracts on Wednesday, trade sources said. They sold 3,000 soybean contracts and bought 5,000 wheat.
Prices at 0312 GMT
Contract Last Change Pct chg MA 30 RSI
CBOT wheat 888.25 -5.75 -0.64% 874.02 63
CBOT corn 741.25 -3.00 -0.40% 766.62 44
CBOT soy 1502.75 -4.25 -0.28% 1580.63 35
CBOT rice $15.30 $0.08 +0.49% $15.48 52
WTI crude $84.84 $0.40 +0.47% $88.81 41
Currencies
Euro/dlr $1.275 $0.046 +3.78%
USD/AUD 1.041 -0.014 -1.34%
Most active contracts
Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight
RSI 14, exponential
(Reporting by Naveen Thukral; Editing by Clarence Fernandez)
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