GRAINS-Wheat falls 2 pct on firm dollar, sluggish exports

Wed May 15, 2013 3:47pm EDT

* CBOT July wheat falls below $7 a bushel to a two-week low
    * Soy hit by technical selling, disappointing U.S. crush
    * Corn follows wheat and soy lower; firm cash underpins July
    * Dry U.S. weather seen good for planting

 (Updates with closing prices)
    By Julie Ingwersen
    CHICAGO, May 15 (Reuters) - Wheat futures on the Chicago
Board of Trade fell 2.4 percent to a two-week low on Wednesday
in reaction to technical selling, a stronger U.S. dollar and
lackluster exports of U.S. grain, traders said.
    Soybeans fell on chart-based selling and monthly data
showing a slower-than-expected U.S. soybean crushing pace.
    Corn was pulled down by soy and wheat in thin trading, along
with favourable U.S. planting weather, but the lead July
contract was underpinned by strong cash markets.
    At the CBOT, benchmark July wheat settled down 17
cents at $6.93-3/4 per bushel, with sales accelerating as the
contract fell below $7.
    July soybeans ended down 2 cents at $14.12-3/4 a
bushel but pared losses after trading low as $14.02-1/4. July
corn settled down 1-3/4 cents at $6.50-3/4 a bushel.
    Wheat came under pressure as the dollar rose to a six-week
high versus the euro on evidence that Europe was stuck in
recession. A stronger dollar makes U.S. wheat less competitive
on the world market. 
    "U.S. soft red winter wheat remains fairly competitive, but
U.S. exports have been beaten down due to a pickup in shipments
from India, and also Southeast Asian millers seeking Australian
wheat," said Terry Reilly, analyst with Futures International in
Chicago.
    "Japan has been holding off on buying feed wheat. That tells
me that global import demand is still kind of neutral," Reilly
added.
    Also bearish were forecasts showing a higher probability of
rain in the Black Sea region.
    "Dryness concerns for the former Soviet Union are easing
somewhat, with better chances of rain for both the Ukraine and
Russia over the next two weeks," FCStone said in a daily note. 
    
    U.S. SOY CRUSHING PACE SLOWS
    Soybean futures were pressured by monthly data from the
National Oilseed Processors Association (NOPA) showing a
bigger-than-expected slowdown in the U.S. soybean crushing pace.
    NOPA reported the soybean crush fell to 120.11 million
bushels in April, from 137.08 million in March. Analysts had
expected a monthly crush of 125.5 million bushels, according to
a Reuters poll, as processors slowed output due to tight
supplies of old-crop soybeans.  
    "It's lower than expected," said Anne Frick, oilseeds
analyst with Jefferies Bache in New York. "Crushers are having
difficulty obtaining beans, and are taking some downtime, which
may have obviously started as early as April."    
    Technical selling played a role as well. July soybeans 
briefly dipped to $14.02-1/4, falling through support at the
contract's 100-day moving average of $14.05.
    In global news, an official Chinese think-tank forecast that
China, the world's top soy buyer, would import a record 66
million tonnes of the oilseed in 2013/14, up 11.9 percent from
2012/13. 
    That figure fell below the U.S. Agriculture Department's
latest forecast for 2013/14 Chinese imports totalling 69 million
tonnes.
    
    FIRM CASH MARKET UNDERPINS CORN
    Corn futures were lower but the front July contract 
gained against back months on firm cash markets and thin sales
of old-crop corn. Farmers across the U.S. Midwest have been
racing this week to catch up on planting, which has been running
at a historically slow pace.
    Also supportive was weekly data from the U.S. Energy
Information Administration showing U.S. ethanol production in
the latest week at 857,000 barrels per day, a three-week high.
 
    Ethanol stocks fell to 16.43 million barrels, the smallest
since November 2011.
    "Everybody was talking about production being unchanged and
it came out almost 1.7 percent higher, so I took it as a little
friendly," said Roy Huckabay with the Linn Group, a Chicago
brokerage.
    U.S. farmers are expected to make rapid progress in planting
corn this week as dry weather provides a window of opportunity
after wet and cold spring weather delayed seeding, which was at
an all-time low. 
    "Analysts expect next week's U.S. government plantings
report to show that between 55 and 60 percent of the corn areas
have been planted," Arnaud Saulais of Starsupply Commodity
Brokers said.   
    
    
 Prices at 2:13 p.m. CDT (1913 GMT)      
                              LAST      NET    PCT     YTD
                                        CHG    CHG     CHG
 CBOT corn                  650.75    -1.75  -0.3%    0.7%
 CBOT soy                  1412.75    -2.00  -0.1%   17.9%
 CBOT meal                  410.50    -1.30  -0.3%   32.7%
 CBOT soyoil                 49.35    -0.41  -0.8%   -5.3%
 CBOT wheat                 693.75   -17.00  -2.4%    6.3%
 CBOT rice                 1523.00   -13.50  -0.9%    4.3%
 EU wheat                   210.00     0.00   0.0%    3.7%
 
 US crude                    94.28     0.06   0.1%   -4.6%
 Dow Jones                  15,257       43   0.3%   24.9%
 Gold                      1394.11   -31.50  -2.2%  -10.9%
 Euro/dollar                1.2874  -0.0044  -0.3%   -0.5%
 Dollar Index              83.8420   0.2470   0.3%    4.6%
 Baltic Freight                861      -11  -1.3%  -50.5%
 
    

 (Additional reporting by Ivana Sekularac in Amsterdam and
Naveen Thukral in Singapore; editing by Marguerita Choy, Bob
Burgdorfer and Sofina Mirza-Reid)