Thu Jan 31, 2013
* Corn rises to highest since early December, wheat firm
* Soybeans fall after rally on technical resistance
* Dry weather threatening soybean yields in Argentina
By Naveen Thukral
SINGAPORE, Jan 31 (Reuters) - U.S. corn edged higher on Thursday, rising to its highest since early December, as persistent dryness in Argentina's farm belt continued to support the market, heightening concerns over tight global supplies.
Soybeans slid 0.3 percent, giving up some of last session's strong gains as the market faced technical resistance, while wheat was little changed after notching up its biggest gain in more than two weeks on Wednesday.
Dry weather is starting to threaten soybean yields in parts of Argentina's main crop belt, the Buenos Aires Grains Exchange said.
It said rain was needed over the short term to interrupt this gradual process of crop deterioration before it started to speed up and caused irreversible damage.
More than 99 percent of Argentina's 2012/13 soybean crop has been planted and consumers need all the Argentine soy and corn they can get after disappointing harvests last year in global breadbaskets Russia, the United States and Australia.
Soybeans, which climbed to a six week high earlier on Thursday, faced technical resistance at $14.82-1/2 per bushel and may retrace to $14.69-1/2 before testing the resistance again, according to Reuters market analyst Wang Tao.
"We need to have more information to feed the bull market or it will run into some sort of resistance," said one Melbourne-based analyst who declined to be identified.
Chicago Board of Trade March corn rose 0.2 percent to $7.41-3/4 a bushel by 0307 GMT, the highest since Dec. 7. March soybeans fell 0.3 percent to $14.75 a bushel and March wheat gained half a cent to $7.87-1/2 a bushel.
Crop forecaster Lanworth lowered its forecast for corn and soybean production in Argentina due to dry weather there.
The company pegged 2012/13 Argentina corn production at 25.6 million tonnes, down from its earlier estimate of 26.0 million. Argentine soybean production was seen at 53.1 million tonnes compared to earlier expectations of 55.2 million.
Strong demand from top soybean importer China is keeping pressure on global supplies of the oilseed. Private exporters reported the sale of 175,000 tonnes of U.S. soybeans to China for delivery in the next marketing year, the U.S. agriculture department said.
The soybean harvest in Brazil, which is poised to surpass the United States as the world's top exporter this year, may not be as large as expected due to heavy rainfall during the past two weeks and drought in the northeast, according to El Tejar Ltd, the world's largest grain producer.
There are also concerns over infrastructure bottlenecks in Brazil that could delay shipments.
"We are more worried about logistical concerns out of Brazil than dryness in Argentina at this stage," the analyst said. "For Argentina's soybean crop February and March are more important than January."
A relentless drought across the U.S. Plains is supporting wheat prices.
Conditions for the winter wheat crop worsened in January as the drought in the central United States showed no signs of ending, according to reports by the USDA's National Agricultural Statistics Service.
Russia's winter grain plantings are in worse condition than the multi-year average but a warm February could bring some relief, Anna Strashnaya, the head of agricultural weather forecasting at Russia's state forecaster, said.
Commodity funds bought a net 10,000 CBOT corn contracts on Wednesday, trade sources said. They bought 4,000 wheat and bought 10,000 soybean contracts.
Prices at 0307 GMT
Contract Last Change Pct chg MA 30 RSI
CBOT wheat 787.50 0.50 +0.06% 870.66 60
CBOT corn 741.75 1.50 +0.20% 766.63 73
CBOT soy 1475.00 -3.75 -0.25% 1579.71 67
CBOT rice $15.43 $0.03 +0.19% $15.48 59
WTI crude $97.91 -$0.03 -0.03% $89.25 79
Currencies
Euro/dlr $1.357 $0.128 +10.38%
USD/AUD 1.041 -0.014 -1.32%
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)
* Corn rises to highest since early December, wheat firm
* Soybeans fall after rally on technical resistance
* Dry weather threatening soybean yields in Argentina
By Naveen Thukral
SINGAPORE, Jan 31 (Reuters) - U.S. corn edged higher on Thursday, rising to its highest since early December, as persistent dryness in Argentina's farm belt continued to support the market, heightening concerns over tight global supplies.
Soybeans slid 0.3 percent, giving up some of last session's strong gains as the market faced technical resistance, while wheat was little changed after notching up its biggest gain in more than two weeks on Wednesday.
Dry weather is starting to threaten soybean yields in parts of Argentina's main crop belt, the Buenos Aires Grains Exchange said.
It said rain was needed over the short term to interrupt this gradual process of crop deterioration before it started to speed up and caused irreversible damage.
More than 99 percent of Argentina's 2012/13 soybean crop has been planted and consumers need all the Argentine soy and corn they can get after disappointing harvests last year in global breadbaskets Russia, the United States and Australia.
Soybeans, which climbed to a six week high earlier on Thursday, faced technical resistance at $14.82-1/2 per bushel and may retrace to $14.69-1/2 before testing the resistance again, according to Reuters market analyst Wang Tao.
"We need to have more information to feed the bull market or it will run into some sort of resistance," said one Melbourne-based analyst who declined to be identified.
Chicago Board of Trade March corn rose 0.2 percent to $7.41-3/4 a bushel by 0307 GMT, the highest since Dec. 7. March soybeans fell 0.3 percent to $14.75 a bushel and March wheat gained half a cent to $7.87-1/2 a bushel.
Crop forecaster Lanworth lowered its forecast for corn and soybean production in Argentina due to dry weather there.
The company pegged 2012/13 Argentina corn production at 25.6 million tonnes, down from its earlier estimate of 26.0 million. Argentine soybean production was seen at 53.1 million tonnes compared to earlier expectations of 55.2 million.
Strong demand from top soybean importer China is keeping pressure on global supplies of the oilseed. Private exporters reported the sale of 175,000 tonnes of U.S. soybeans to China for delivery in the next marketing year, the U.S. agriculture department said.
The soybean harvest in Brazil, which is poised to surpass the United States as the world's top exporter this year, may not be as large as expected due to heavy rainfall during the past two weeks and drought in the northeast, according to El Tejar Ltd, the world's largest grain producer.
There are also concerns over infrastructure bottlenecks in Brazil that could delay shipments.
"We are more worried about logistical concerns out of Brazil than dryness in Argentina at this stage," the analyst said. "For Argentina's soybean crop February and March are more important than January."
A relentless drought across the U.S. Plains is supporting wheat prices.
Conditions for the winter wheat crop worsened in January as the drought in the central United States showed no signs of ending, according to reports by the USDA's National Agricultural Statistics Service.
Russia's winter grain plantings are in worse condition than the multi-year average but a warm February could bring some relief, Anna Strashnaya, the head of agricultural weather forecasting at Russia's state forecaster, said.
Commodity funds bought a net 10,000 CBOT corn contracts on Wednesday, trade sources said. They bought 4,000 wheat and bought 10,000 soybean contracts.
Prices at 0307 GMT
Contract Last Change Pct chg MA 30 RSI
CBOT wheat 787.50 0.50 +0.06% 870.66 60
CBOT corn 741.75 1.50 +0.20% 766.63 73
CBOT soy 1475.00 -3.75 -0.25% 1579.71 67
CBOT rice $15.43 $0.03 +0.19% $15.48 59
WTI crude $97.91 -$0.03 -0.03% $89.25 79
Currencies
Euro/dlr $1.357 $0.128 +10.38%
USD/AUD 1.041 -0.014 -1.32%
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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