GRAINS-Corn up 1 percent; 3rd day of gains on tight stocks

Mon Mar 11, 2013 3:28pm EDT

(Updates to include close of U.S. trading session, adds ethanol
RIN details and prices)
    By Sam Nelson
    CHICAGO, March 11 (Reuters) - Chicago Board of Trade (CBOT)
corn futures rose over one percent, posting advances for the
third straight session on Monday on tight stocks and on
spillover from the rally that followed the bullish corn supply
numbers the U.S. government released Friday, traders said.
    "Corn is leading everything higher today and it's technical
support after the USDA report. Managed money is buying after the
aggressive fund liquidation that we've seen," said Shawn
McCambridge, an analyst for Jefferies Bache.
    The U.S. Department of Agriculture's March supply/demand
report on Friday kept projected corn stocks unchanged at a
17-year low. The market had expected higher inventories.
    "Corn was up from USDA's report Friday; that is being
questioned by some, but it's all we have to work with for now,"
said Rich Nelson, director of research for Illinois-based
analytical firm Allendale Inc.
    Wheat turned up for the third consecutive trading session on
spillover buying from strong gains in corn futures.
    Soybean also rose for the third day in a row on firm cash
soy, slow farmer selling and slow shipments from the 2013 South
American harvest.
    Traders were beginning to shift some attention to the
distant, or new-crop row-crop futures contracts, which were
higher but lagged gains in the old-crop or nearby futures
contracts.
    "The improving weather I think is limiting gains as well,"
Nelson said.
    Agricultural meteorologist John Dee of Global Weather
Monitoring said additional drought-relieving rain fell over the
weekend across a broad swath of the U.S. crop region.
 
    The U.S. winter wheat crop is near its early growth stage
and U.S. farmers soon will be planting the 2013 U.S. corn and
soybeans.
    The U.S. crop belt is slowly emerging from the worst drought
in more than 50 years, which trimmed production. 
    CBOT May corn was up 7-3/4 cents per bushel at
$7.11-1/4, May soybeans rose 9-1/2 cents to $14.80-1/2 and
CBOT wheat for May delivery was up 3 cents at $7.00.
    CBOT new-crop December corn rose 7 cents and new-crop
November soybeans were up 1/2 cent.
    In closely watched monthly supply/demand estimates on
Friday, the USDA kept corn ending stocks steady at 632 million
bushels, the smallest in 17 years and a bare three-week supply.
Analysts polled by Reuters had expected it to increase its
estimate for corn inventories 1.7 percent. 
    However, analysts said overall adjustments in the USDA's
monthly report were not dramatic and that they would wait for   
 the department's quarterly U.S. stocks report later this month
for clearer supply/demand indications.
    "With this hurdle (the monthly USDA report) cleared, we
expect higher old-crop corn prices in the weeks ahead as the
market positions ahead of the March 28 Grain Stocks report,"
Morgan Stanley analysts said in a note.
    The market for corn-based ethanol blending credits known as
RINs surged to a new record on Monday in a market surge driven
by fears of supply shortages and blending limits for alternative
fuel.  
    Traders said RIN blending credits for 2013 were trading
between $1.05 and $1.13 a gallon, up from roughly 74-80 cents a
week ago and well up from the mid-20 cents at the end of
January.
    "Ethanol (RIN) is going crazy. These ethanol values (RINs),
they are phenomenal," said Jeff Hove, who trades RINs for
roughly 150 U.S. blenders through RINAlliance, an aggregator and
trader of the ethanol credits.
    The RBOB gasoline to ethanol spread was at 6.1
cents per gallon, premium gasoline, down 0.8 cent from Friday.
       
 Prices at 2:11 p.m. CST (1911 GMT)      
                              LAST      NET    PCT     YTD
                                        CHG    CHG     CHG
 CBOT corn                  734.50     9.25   1.3%   13.6%
 CBOT soy                  1514.75     6.25   0.4%   26.4%
 CBOT meal                  438.10     2.00   0.5%   41.6%
 CBOT soyoil                 50.24     0.08   0.2%   -3.6%
 CBOT wheat                 694.00     4.00   0.6%    6.3%
 CBOT rice                 1500.00   -12.50  -0.8%    2.7%
 EU wheat                   237.75     3.75   1.6%   17.4%
 
 US crude                    91.88    -0.07  -0.1%   -7.0%
 Dow Jones                  14,429       32   0.2%   18.1%
 Gold                      1580.41     2.67   0.2%    1.1%
 Euro/dollar                1.3035   0.0031   0.2%    0.7%
 Dollar Index              82.6020  -0.0940  -0.1%    3.0%
 Baltic Freight                847        4   0.5%  -51.3%
        
    
    

 (Additional reporting by Carey Gillam in Kansas City, Gus
Trompiz in Paris and Naveen Thukral in Singapore; Editing by
Chizu Nomiyama)