GRAINS-Freeze fears boost wheat; soy jumps on soaring cash

Thu Apr 25, 2013 2:59pm EDT

* Strong cash soybean market lends support to futures
    * Worry about freeze damage supports wheat prices
    * KCBT wheat up most in 5 months
    * Weak dollar, soaring gold and crude oil lend support


    By Sam Nelson
    CHICAGO, April 25 (Reuters) - Chicago Board of Trade (CBOT)
wheat futures jumped 1.3 percent on Thursday, posting its
biggest one day advance in two weeks on concerns about
production declines in the U.S. Plains hard red winter wheat
belt due to freeze damage while soybeans leaped 1.4 percent, the
most in a month, on soaring U.S. cash soy markets.
    Kansas City Board of Trade (KCBT) hard red winter (HRW)
wheat for May delivery leaped 3.3 percent, or 24-3/4
cents per bushel ending the session at $7.63-3/4 per bushel,
posting the biggest one day advance for a spot KCBT wheat
futures contract in five months.
    Wheat traded on the KCBT is the kind grown in the Plains
states of Kansas, Oklahoma and Texas, the area affected by a
series of freezes in April. 
    Support to grains and the soy complex also stemmed from
outside markets with a big rebound in gold and a weak dollar
cited as influences.
    "We have an overall commodity short-covering scenario here.
Everything from copper to crude oil is up, grains and livestock
are included," said Mike Zuzolo, analyst for Global Commodity
Analytics.
    "About every major currency is up against the dollar, grains
have picked up on that and livestock too." 
    Gold was soaring nearly 3 percent and crude oil up over 2
percent when grain futures neared their close of trading at 1:15
p.m. CDT (1815 GMT).  
    Corn rode the coattails of soybeans and wheat to a higher
close with a sale of U.S. corn to global consuming giant China
contributing to the advances. 
    U.S. weather issues also continued to rattle the corn market
with bullish input from slow seedings pitted against bearish
influences from recent improved soil moisture profiles in the
drought-stricken U.S. Midwest.
     CBOT wheat reversed three consecutive days of declines led
by soaring KCBT hard red winter wheat futures tied to concerns
about production declines following a series of April freezes in
the U.S. Plains hard red winter wheat producing region.
    "There is demand for the Kansas City market because of
expected losses of production from previous sub freezing
temperatures," said Shawn McCambridge, analyst for Jefferies
Bache.
    "We have the wheat quality tour next week and that will give
us a better idea of what has happened, but I think everyone is
expecting production declines."
    The annual Wheat Quality Council tour of Kansas wheat fields
will be next week and freeze damage results from southern Kansas
and also the Texas and Oklahoma Panhandle regions are expected
to be reported by the tour.   
    Traders and analysts said the soybean futures market found
solid support from the strong cash soy markets in the U.S. due
to tight stocks, slow farmer selling and slow shipments of soy
from South America's bumper harvest.
    U.S. soybean cash basis bids rose to new seasonal record
highs at many processing plants in the Midwest, and offers for
soymeal also gained as farmers held tight to the thin stockpile
of supplies remaining from last year's harvest, dealers said.
 
    CBOT soybeans for May delivery were up 19-1/2 cents at
$14.23-1/2 per bushel, May delivery corn was up 5-3/4
cents at $6.45-1/2, and wheat for May delivery was up
9-1/2 cents at $7.01-1/4.
    Gains for each commodity were trimmed by a
slower-than-expected export sales pace for each as seen in the
U.S. government's weekly export report.
    "There may not be much follow through since the export sales
weren't so good, on about everything but corn," Zuzolo said.    
    The U.S. Department of Agriculture's (USDA) weekly export
sales report released on Thursday showed last week's export
sales of wheat and soybeans well below analysts' estimates,
while corn exports were within the range of estimates.
  
    USDA reported corn sales at a four-week low, net wheat sales
at an 11-week low, and net soybean sales at a two-week low.
    China made its first old-crop soybean cancellation in 10
weeks and bought its largest new-crop volume in a month,
according to the USDA report.
    China is the world's largest buyer of soybeans. In its daily
export report on Thursday, USDA said 540,000 tonnes of U.S. corn
were sold to China and an unknown destination. 

    CORN PLANTINGS SHOULD GAIN TRACTION
    Traders in the corn market continued to weigh the cost of
planting delays due to cold, wet weather against the benefit of
valuable additions of moisture to drought-depleted soils.
    Corn plantings should speed up next week.
    Drier, warmer weather over the next two weeks should boost
U.S. corn seedings and aid growth of the winter wheat crop, an
agricultural meteorologist said. 
    Planting weather, while improved, will be less than ideal
since there will be some showers early next week, mainly in the
northwestern Midwest, spreading eastward next Wednesday and
Thursday, said Commodity Weather Group (CWG) meteorologist Joel
Widenor. "Temperatures will be warming into the 70s (degrees
Fahrenheit/20s degrees Celsius) by Sunday," he said.
    Excessive wet, cold weather in the U.S. crop belt has
stalled corn and spring wheat seedings and further harmed the
winter wheat crop, which struggled through the winter due to
last season's drought.
    The USDA, in its weekly crop progress report on Monday, said
only 4 percent of the U.S. corn crop had been planted, up from 2
percent a week earlier but well behind the 16 percent five-year
average for the week. 
    Thirty-five percent of the U.S. winter wheat crop was in
good-to-excellent condition, down from 36 percent a week earlier
and well below the 63 percent of a year earlier.
    Only 7 percent of the U.S. spring wheat crop had been
planted, up from 6 percent a week earlier but well behind the 24
percent five-year average.
    
 Prices at 1:31 p.m. CDT (1831 GMT)      
                              LAST      NET    PCT     YTD
                                        CHG    CHG     CHG
 CBOT corn                  645.25     5.75   0.9%   -0.2%
 CBOT soy                  1423.50    18.50   1.3%   18.8%
 CBOT meal                  414.30     8.40   2.1%   33.9%
 CBOT soyoil                 49.77     0.59   1.2%   -4.5%
 CBOT wheat                 701.25     8.75   0.0%    7.4%
 CBOT rice                 1485.50    -5.00  -0.3%    1.7%
 EU wheat                   241.25     1.50   0.6%   19.1%
 
 US crude                    93.52     2.11   2.3%   -5.4%
 Dow Jones                  14,746       70   0.5%   20.7%
 Gold                      1466.50    35.70   2.5%   -6.2%
 Euro/dollar                1.3017   0.0002   0.0%    0.6%
 Dollar Index              82.7330  -0.3150  -0.4%    3.2%
 Baltic Freight                872       -7  -0.8%  -49.8%