GRAINS-Corn losses stretch to 9th day; wheat rebounds

Wed Feb 13, 2013 3:36pm EST

* Corn sheds gains in choppy trade
    * Snow, rain improve U.S. wheat output prospects
    * Lower wheat prices make U.S. supplies competitive

 (Recasts with closing U.S. prices)
    By Rod Nickel
    WINNIPEG, Manitoba, Feb 13 (Reuters) - Corn prices fell for
a ninth straight session on Wednesday as South American weather
improved, but bargain buyers lifted wheat off a seven-month low
and took soybeans from a one-month bottom.
    Trade was choppy as weather conditions continued to boost
prospects for U.S. wheat and South American corn and soybeans,
pushing all three to recent lows early. Bargain buyers moved in,
but a lack of follow-through purchases on corn left the market 
slightly weaker at the close.
    Corn's losing streak is the longest in 5-1/2 years.
    The low prices also convinced funds to pause recent selling,
said Arlan Suderman, senior market analyst for Water Street
Advisory in Peoria, Illinois.
    "We hit some intermediate levels of support, starting with
wheat and corn, but really all the markets. I'm not convinced
we're at the bottom, but we were oversold," Suderman said.
    "Considering how far we've fallen it's not much of a
bounce."
    Chicago Board of Trade March corn touched a one-month
low before ending down 3/4 cent at $6.95-1/2 a bushel. 
    Corn and soybean prices reached record highs in 2012 as
drought ravaged U.S. growing areas. But prices fell back as U.S.
crops turned out better than feared, and large Brazilian and
Argentine harvests in early 2013 look set to replenish global
supplies.
    Early expectations are for robust U.S. spring planting of
corn and soybeans. 
    "We have a long planting season and growing season ahead,
and I think maybe (selling) is a little overdone," said Shawn
McCambridge, analyst at Jefferies Bache in Chicago, but added
that there appears to be little reason to encourage a bullish
view.
    Traders have noted growing dissatisfaction at still
relatively high U.S. old crop corn prices, with South Korea's
largest feedmaker, NOFI, excluding U.S. grain from an
international tender to purchase up to 195,000 tonnes of corn.
U.S. corn was seen as not acceptable due to price and quality
concerns. 
    "The crisis drought of 2012 now looks like it's being
followed by good South American crops and prospects of a normal
U.S. harvest, and importers want to see prices marked down to
reflect this," one European trader said.
    March soybeans rose 2-1/4 cents, or 0.2 percent, to
$14.23 a bushel, after touching the lowest nearby price since
Jan. 11.
    Warm, dry conditions across Argentina are stressing soybean
crops, however, rains are expected to return next week, said Don
Keeney, a meteorologist at MDA Weather Services, in a note to
clients.
    Friday's U.S. Department of Agriculture (USDA) report
forecast better-than-expected global supplies of corn and
soybeans in the coming months.
    Chicago March wheat added 3-1/2 cents, or 0.5 percent,
to $7.35-1/2 a bushel. Wheat recovered after dipping earlier to
$7.22-1/2, the lowest nearby price since last summer.
    Crop-friendly rainfall and snow were moving across
drought-stricken areas of the U.S. Plains hard red winter wheat
region at mid-week, providing much-needed relief ahead of the
growing season for the 2013 crop, an agricultural meteorologist
said on Wednesday. 
    "Nebraska, Kansas and Colorado now have the chance for two
shower events over the next two weeks that would offer some
improvement in topsoil moisture," said Commodity Weather Group
(CWG) meteorologist Joel Widenor.
    Concerns about demand and improving U.S. weather have
weakened wheat to the point where it may attract buying interest
for export or use as domestic feed, McCambridge said.
    "U.S. wheat should be competitive at these levels," he said.
    Speculators in Chicago Board of Trade corn and soybeans held
long positions as of the week to Feb. 5, while CBOT wheat
speculators were net short. 
    The market will look to fresh planting estimates from the
U.S. Department of Agriculture at its annual forum late next
week. The acreage estimates could be even larger than the USDA's
baseline projections released on Monday, observers say.
 
    
 Prices at 2:19 p.m. CST (2019 GMT)      
                              LAST      NET    PCT     YTD
                                        CHG    CHG     CHG
 CBOT corn                  695.50    -0.75  -0.1%   -0.4%
 CBOT soy                  1423.00     2.25   0.2%    0.3%
 CBOT meal                  408.10    -2.20  -0.5%   -3.0%
 CBOT soyoil                 51.66     0.56   1.1%    5.1%
 CBOT wheat                 735.50     3.50   0.5%   -5.5%
 CBOT rice                 1585.50    19.50   1.3%    6.7%
 EU wheat                   242.25     0.50   0.2%   -3.2%
 
 US crude                    97.04    -0.47  -0.5%    5.7%
 Dow Jones                  13,959      -60  -0.4%    6.5%
 Gold                      1642.36    -8.04  -0.5%   -1.9%
 Euro/dollar                1.3448  -0.0005   0.0%    1.9%
 Dollar Index              80.0940  -0.0120   0.0%    0.4%
 Baltic Freight                751        4   0.5%    7.4%
 
    

 (Additional reporting by Julie Ingwersen and Sam Nelson in
Chicago, Michael Hogan in Hamburg and Mayank Bhardwaj in New
Delhi, editing by Bob Burgdorfer and Marguerita Choy)
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