GRAINS-U.S. wheat rises above $9 but corn, soy weak

Thu Nov 8, 2012 3:45pm EST

* CBOT wheat hits highest level in nearly 6 wks on crop woes
    * Soy down on worries of wilting export interest
    * Trading volumes thin ahead of USDA report

 (Recasts; adds new analyst quote, updates prices, changes
byline, dateline, pvs LONDON;)
    By Mark Weinraub
    CHICAGO, Nov 8 (Reuters) - U.S. wheat futures rose for the
fourth day in a row Thursday, rallying above $9 a bushel to a
near six-week high, as traders staked out positions ahead of a
government report expected to show tightening global supplies.
    Soybean futures fell, pressured by declining export demand,
and pulled corn prices lower, traders said.
    The market's focus remained on wheat as expectations of
smaller crops in places like Argentina and Australia, coupled
with dry conditions in key growing areas of the U.S. Plains,
provided support to a commodity that has been stuck in a narrow
trading range for months.
    Wheat bulls were hopeful that problems with the crop
overseas could boost demand for U.S. supplies on the export
market.
    "People should be buying it," said Jerry Gidel, analyst for
Rice Dairy. "It is a bargain here. The world's normal exporters
... do not have a lot of excess supplies."
    CBOT December soft red winter wheat futures ended up
8-1/2 cents at $9.02-1/2 a bushel. Prices peaked at $9.05, their
highest level since Sept. 28.
    CBOT wheat has risen 4.3 percent this week, its biggest
four-day rally since August.
    January soybean futures were 11-1/4 cents lower at
$14.95-3/4 a bushel, the benchmark contract's first close below
$15 since Oct. 16. CBOT December corn dropped 3 cents to
$7.41-1/4 a bushel.
    The U.S. Agriculture Department said early on Thursday that
weekly export sales of soybeans were at their lowest point in 16
months. Net soybean export sales of 191,900 tonnes were well
below forecasts for 600,000 to 800,000 tonnes and included a
cancellation of 545,600 tonnes from an unknown country.
    "Cancellations in export sales in soybeans certainly will
not go unnoticed," said Greg Wagner, president of GWX - Ag
Advisors. "It begs the questions as to whether or not the
market's poor price performance ... might in fact partly reflect
a nervousness regarding future cancellations."
    A firm dollar, which makes investors less likely to stock
their portfolios with risky assets such as grains and reduces
the need to buy commodities as a hedge against inflation, added
further pressure on corn and soybeans.
    Analysts expect the USDA will boost its forecast for U.S.
corn and soybean yields in its monthly supply and demand report.
Field reports from harvest indicate the damage from the worst
drought to hit the Midwest in more than 50 years was not as bad
as initially feared. 
    USDA also was seen cutting its global wheat stocks forecast
for the second month in a row due to weather-related problems in
key growing areas such as Ukraine, Australia and Argentina. 
    "At some point, this winter wheat business is going to shift
back to the U.S. That time is getting pretty close," a wheat
trader on the floor of the Chicago Board of Trade said.
    Australia, the world's second-largest wheat 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.
    Australia's wheat exports may shrink to 16.85 million
tonnes, the lowest in three years, according to a survey of
analysts in a Reuters poll. 
    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.
 Prices at 2:27 p.m. CST (2027 GMT)      
                              LAST      NET    PCT     YTD
                                        CHG    CHG     CHG
 CBOT corn                  741.25    -3.00  -0.4%   14.7%
 CBOT soy                  1499.25    -9.50  -0.6%   25.1%
 CBOT meal                  462.90    -6.60  -1.4%   49.6%
 CBOT soyoil                 48.77     0.15   0.3%   -6.4%
 CBOT wheat                 902.50     8.50   1.0%   38.3%
 CBOT rice                 1477.00   -16.50  -1.1%    1.1%
 EU wheat                   278.50     2.50   0.9%   37.5%
 
 US crude                    85.08     0.64   0.8%  -13.9%
 Dow Jones                  12,876      -56  -0.4%    5.4%
 Gold                      1733.61    17.30   1.0%   10.9%
 Euro/dollar                1.2746  -0.0024  -0.2%   -1.5%
 Dollar Index              80.8010   0.0420   0.1%    0.8%
 Baltic Freight                916        0   0.0%  -47.3%
 
In U.S. cents, benchmark contracts, except EU wheat (euros) and
soymeal (dollars). CBOT wheat, corn and soybeans per bushel,
rice per hundredweight, soymeal per ton and soyoil per lb.
     

 (Additional reporting by Sam Nelson in Chicago, Naveen Thukral
in Singapore, Gus Trompiz in Paris and Nigel Hunt in London;
Editing by Maureen Bavdek and John Wallace)