* Wheat crop issues in the Black Sea, Australia, Argentina
* Lower global crop size leads to hopes for US export sales
* Short-covering, wheat and soy rally buoy corn
* Brisk exports, slow farmer selling and firm cash lift soy
By Sam Nelson
CHICAGO, Oct 23 Chicago Board of Trade wheat
futures rebounded to near a four-month high on Wednesday on
concerns about the fate of crops in several key regions,
including the Black Sea, Australia and Argentina.
"The thought is that South America will be a big importer of
U.S. wheat this year. South America's wheat crop is in bad shape
compounded by acreage shifts to corn and soybeans," said Ted
Seifried, an analyst for Zaner Ag Hedge.
He said Brazil is the world's third-largest wheat importer
and they normally import most of their needs from Argentina, but
crop and weather issues there may shift the business to the
CBOT corn followed wheat higher and garnered additional
support from short-covering, while soybeans gained on brisk
export sales of the U.S. crop, including a sale on Wednesday of
120,000 tonnes to Russia.
Slow farmer selling of corn and soybeans despite active
harvesting of each crop in the United States also contributed to
the advances of corn and soybean futures.
Chicago Board of Trade December wheat closed a penny
per bushel higher at $7.01-3/4, December corn was up 4-1/2
at $4.42-3/4 and November soybeans gained 7-3/4 to $13.10.
Technical traders cited chart resistance for the CBOT
December wheat contract at its 200-day moving average of $7.12
per bushel. The session high was $7.10-1/2.
Traders said the wheat market, which has risen four out of
the past five trading sessions, was getting significant
attention as CBOT spot wheat futures have gained 4.7
percent for the month.
"There is still concern that Argentina will not allow wheat
exports in December and limit exports in January and February
until the Agriculture Ministry has a better handle on harvested
supplies," said Sterling Smith, a futures specialist for
The United States has been selling wheat to Brazil recently
due to the lack of supplies in neighboring Argentina and very
high prices in South America.
There was additional support for wheat on forecasts of dry
weather in Australia, the world's second-largest exporter.
Australia is expected to experience hotter and drier weather
than normal across much of the country over the next three
months, the weather bureau said on Wednesday, potentially
threatening agricultural production such as wheat.
"People are also saying frost damage to Australian wheat was
pretty extensive," a trader said.
U.S. HARVEST PROGRESSES
Although corn futures held firm on Wednesday, gains were
slowed by active harvesting of the U.S. crop and reports of
"Corn, for the most part, is trying to follow soybeans and
wheat," Seifried said.
The market is braced for a likely record-large corn harvest
and a rebound in U.S. supplies from this season's 17-year low to
an eight-year high next year.
The big demand for U.S. soybeans and slow farmer selling
continues to buoy the soybean futures market.
"Soybeans have found strength from improving basis levels
and strong export demand," Seifried said.
"With soybean harvest over 60 percent complete it is thought
that producer selling may slow in coming weeks. This seemingly
has caused an influx of new export business as global end users
look to fill their October-February needs," he said
However, U.S. farmers are harvesting what is likely to be
the fourth-largest soy crop ever, a factor that is slowing price
advances in the futures market.
"The November contract is now trading well above
several significant moving averages, but we may see resistance
at the 50-day average near $13.17," Smith said.
The bellwether November contract on Wednesday reached a peak
of $13.18-3/4 per bushel before easing back.
(Additional reporting by Michael Hogan in Hamburg and Naveen
Thukral in Singapore; Editing by Maureen Bavdek)