GRAINS-U.S. wheat futures extend rally on dry weather threat

Thu May 17, 2012 1:27am GMT
 

SYDNEY, May 17 (Reuters) - U.S. wheat futures climbed on
Thursday, extending gains from the previous session when the
grain posted its biggest daily price rise in 6-1/2 weeks, on
concerns about dry conditions damaging the winter wheat crop.	
     Chicago Board Of Trade July wheat futures rose 0.74
percent to their highest level since May 1 after soaring 5
percent on Wednesday, as weather concerns rattled the market.	
    CBOT July soybean futures rose 0.56 percent, having
climbed 0.6 percent in the previous session, while CBOT corn
 futures opened flat after rising 3.8 percent on Wednesday.	
        	
    FUNDAMENTALS	
    * Investors covered short positions as the winter
wheat-growing U.S. southern Plains looked to stay mostly dry
this week, traders said. 	
    * Traders also worried by Russia drought, which analyst
warned on Tuesday could cause irreversible damage to some crops
in the south. 	
    * The U.S. Department of Agriculture said exporters sold
900,000 tonnes of U.S. corn to China, including 180,000 tonnes
of old-crop supplies, even as China said it expected a
record-large domestic corn crop in 2012. 
 	
    * The China National Grain and Oils Information Center
projected on Wednesday a 7 percent drop in Chinese soy
production this year, a reduction that would boost imports by
the world's top buyer of the oilseed. 	
    * China's corn supply is expected to stay tight in 2012/2013
(Oct/Sept), leading to a continued increase in imports of the
grain used mainly for animal feed production, according to
estimates by an official think-tank. The China National Grain
and Oils Information Center said China is expected to consume
199 million tonnes of the grain in 2012/2013, while domestic
production has been projected at 197.5 million tonnes for the
year. 	
    * Dry, warm weather forecast for the U.S. Midwest this week
looked to aid corn and soybean planting, but some rain is needed
to boost soil moisture in southern areas of the region.	
    * Lawmakers loyal to President Cristina Fernandez scurried
to gather the votes needed to raise land taxes in Argentina's
No. 1 grains province on Wednesday, while farmers went on strike
to fight the proposal. Industry insiders do not expect the
planned five-day suspension of grains sales by Buenos Aires
farmers to slow exports from Argentina, the world's
third-biggest soybean supplier. But if lawmakers approve the tax
hike, more protests could follow and international shipments
could be disrupted.	
    	
    MARKET NEWS  	
   * The euro dropped to a four-month low against the U.S.
dollar on Wednesday, sliding for a fourth consecutive session
and likely to face more losses on fears about a Greek exit from
the euro zone.  	
   * Crude oil futures tumbled on Wednesday, pressured along
with U.S. equities as banking troubles in Greece sparked risk
aversion across markets worried about euro zone debt.  	
   * U.S. stocks closed lower in a choppy session on Wednesday,
with the S&P 500 logging its fourth straight decline as
investors worried about Greece's future as a member of the euro
zone.  	
    	
    DATA/EVENTS (GMT) 
0430  Japan  Industrial output rev           Mar    
0700  Spain  Q1 GDP 
1230  U.S.   Jobless claims                  Weekly 
1230  U.S.   Treasury Secretary Geithner speaks 
1400  U.S.   Leading indicators April 
1400  U.S.   Philadelphia Fed business activity index for May 
1430  U.S.   EIA natural gas stocks          Weekly 	
    	
  Grains prices at  0018 GMT
  Contract        Last    Change  Pct chg  Two-day chg MA 30   RSI 
  CBOT wheat     643.50     4.75  +0.74%    -2.05%     614.11   69
  CBOT corn      619.75    -0.25  -0.04%    -5.88%     609.25   42
  CBOT soy      1430.00     8.00  +0.56%   +16.50%    1161.98   43
  CBOT rice      $15.19    $0.07  +0.46%    +3.69%     $14.45   48
  WTI crude      $93.17    $0.36  +0.39%    -9.51%     $98.63   17
  Currencies                                                
  Euro/dlr       $1.274  -$0.020  -1.56%    -2.37%
  USD/AUD         0.994   -0.043  -4.11%    -4.14%
  Most active contracts
  Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight
  RSI 14, exponential
 	
 (Reporting by Colin Packham)

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