May 28, 2014 / 4:13 PM / 4 years ago

GRAINS-U.S. wheat falls for 6th day; corn, soy rebound

* Wheat faces pressure as weather aids U.S. crops
    * U.S. planting progress for corn, wheat weighs
    * Tight U.S. supplies support soybeans

 (Updates U.S. market activity to close, adds analyst comment)
    By Michael Hirtzer
    CHICAGO, May 28 (Reuters) - U.S. wheat fell on Wednesday,
extending a week-long decline on investment fund selling tied to
favorable conditions for crops in the world's top producer and
exporter.
    Cheaper grain offered from shippers in Europe and the Black
Sea region also weighed on futures for U.S. wheat. 
    Corn was slightly higher but hovering near a three-month low
while nearby soybean contracts also posted narrow gains as
futures rebounded after large declines on Tuesday.   
    Trading volumes spiked in the previous session while open
interest in grains futures declined, suggesting liquidation of
long bullish bets by investors. The volume moves came after U.S.
regulatory data last week showed that speculative traders, a
category that includes hedge funds, reduced long holdings in
corn and soybeans and switched to a net short in wheat futures.
 
    "Much of what we are seeing is simple position squaring by
the funds ahead of month end. Fresh news is very limited for
trade to work with, limiting trader interest," said Karl Setzer,
analyst at the MaxYield Cooperative in West Bend, Iowa.
    With two trading days left in May, wheat futures were
on pace to decline more than 10 percent for the month - their
worst monthly performance since September 2011. Corn was
heading for their largest monthly since September of last year
and soybeans the largest decline since January of 2014.
    The big drop in prices generated modest buying interest,
with wheat having its smallest daily drop during its recent
six-session streak of losses while corn and soybeans pared
earlier losses.
    "It got oversold and not a lot of guys want to sell into a
hole like this," said Chris Manns, analyst at the Traders Group
in Chicago. 
    CBOT July wheat finished 2-1/4 cents lower at
$6.38-3/4 per bushel while CBOT July corn gained 2-3/4
cents to $4.72-1/2 and July soybeans jumped 9 cents to
$14.97-3/4.
    "The better weather conditions in the U.S. were the main
reason why corn, wheat and cotton prices dropped to three-month
lows in recent days," Commerzbank said in a report. "The soybean
price, on the other hand, is still being helped by the currently
tight supply situation in the U.S., where stocks have declined
sharply as a result of high exports."
    The U.S. Department of Agriculture said in its weekly crop
report that U.S. winter wheat was rated 31 percent good to
excellent as of May 25, up 2 percentage points from a week
earlier. The USDA also said that corn planting was 88 percent
complete as of May 25, matching analysts' expectations as well
as the five-year average.
    "Planting progress is significantly better and forecasts
show that the weather is likely to be favourable for crop
development," said Vyanne Lai, of National Australia Bank. 
"Earlier concerns about dry conditions impacting the winter
wheat crop in the U.S. Plains have eased somewhat following
rain."
    Concern about tight U.S. soybean supplies after a hefty flow
of exports this season supported soybeans. USDA said China
bought 110,000 tonnes of soybeans for delivery in the new-crop
marketing year, the eighth such "flash" sale this month.
 
    
 Prices at 1:43 p.m. CDT (1843 GMT)      
                              LAST      NET    PCT     YTD
                                        CHG    CHG     CHG
 CBOT corn                  472.50     2.75   0.6%   12.0%
 CBOT soy                  1497.75     9.00   0.6%   14.1%
 CBOT meal                  498.50     4.30   0.9%   13.9%
 CBOT soyoil                 39.63    -0.31  -0.8%    2.1%
 CBOT wheat                 638.75    -2.25  -0.4%    5.5%
 CBOT rice                 1505.00    -4.00  -0.3%   -3.0%
 EU wheat                   192.50    -0.50  -0.3%   -7.9%
 
 US crude                   102.77    -1.34  -1.3%    4.4%
 Dow Jones                  16,659      -17  -0.1%    0.5%
 Gold                      1258.46    -4.93  -0.4%    4.4%
 Euro/dollar                1.3593  -0.0039  -0.3%   -0.4%
 Dollar Index              80.5680   0.2160   0.3%    0.7%
 Baltic Freight                954      -19  -2.0%  -58.1%
 
 (Additional reporting by Michael Hogan in Hamburg and Naveen
Thukral in Singapore; Editing by David Evans, James Dalgleish
and Diane Craft)
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