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U.S. wheat up for second day, corn rises on weather woes
May 26, 2011 / 4:46 AM / 7 years ago

U.S. wheat up for second day, corn rises on weather woes

NEW DELHI (Reuters) - U.S. wheat futures rose 1 percent on Thursday, extending gains into a second straight day as unfavorable weather conditions threaten crops in main producing countries, while corn jumped as plantings lag at rain-soaked farms in the United States.

Excessive rains have delayed seeding of U.S. corn, soybean and spring wheat which could reduce yields. Wheat crops are also suffering from dry weather in the United States, Europe and China.

Chicago Board of Trade July wheat rose 1.1 percent to $8.05- a bushel by 12:06 a.m. EDT and soybeans for July delivery added 0.4 percent to $13.83 a bushel. CBOT July corn was up 0.7 percent to $7.47- a bushel.

“Weather is giving wheat growers a double whammy. It is too dry in China and Europe, and there are excessive rains in the U.S.,” said Ker Chung Yang, an investment analyst at Phillip Futures in Singapore.

Showers in the northern U.S. Plains put spring wheat plantings behind schedule, with planting only 34 percent complete in the top wheat state of North Dakota, down from the normal pace of 85 percent.

Rains and floods have hit the U.S. spring wheat planting window, which is progressing at its slowest pace since 1986.

In the eastern U.S. Midwest, showers were expected to bring the final corn and soybean seedings to a standstill this week.

A Reuters poll showed floods and heavy rains reduced overall U.S. corn acreage by 2 million acres this year, and only a fraction of that land will be planted with soybeans instead.

Recovering from sharp sell-offs this week, corn and soybeans have risen on apprehensions that delayed seeding may cut yields.

About 80 percent of the U.S. corn crop was planted, according to the U.S. Agriculture Department, but rains may bring plantings to halt this week.

Wheat gained despite reports that Russia is considering lifting a ban on exports, as the country is expected to produce 83-84 million tonnes of grains this year, including 55 million tonnes of wheat.

Output is expected to go up in Australia, the world’s fourth-biggest exporter of the grain, as recent rains help boost planting.

“Bad weather conditions are likely to keep wheat higher despite expectations of supplies from Russia. I do not see Russia entering the export market anytime soon. It may take more than six months,” Chung Yang said.

Russia may have an exportable grain surplus of more than 15 million tonnes this year if weather and pests do not restrict an expected good crop, a powerful grain lobby said.

The Ukrainian government this week canceled grain export quotas which were due to remain in place until June 30, Interfax Ukraine news agency quoted Farm Minister Mykola Prysyazhnyuk as saying.

A weakness in the dollar, which boots demand for greenback-priced commodities, kept prices high. On Thursday, the dollar index .DXY fell 0.43 percent

The euro regained some ground against the dollar on Thursday as a sharp recovery in oil prices induced short-covering, but lingering uncertainty over debt problems in Greece and other euro zone countries were expected to limit strong follow-up buying.

Commodity funds were net buyers of an estimated 9,000 contracts of Chicago Board of Trade corn futures on Wednesday, trade sources said. They were net buyers of an estimated 4,000 wheat contracts and bought 4,000 soybean contracts.

Editing by Ed Lane

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