Wheat firms as US crop deteriorates, soy up for 2nd day
Wednesday, 14 November 2012
By Asad Naeem
SINGAPORE: Chicago wheat edged higher on Wednesday, snapping a three session declining streak, as a further decline in the condition of the US winter crop supported the market.
Soybeans rose for a second straight session with a fall in prices to a four-and-half month low boosting demand from the end users, while corn gained as tight global supplies continue to underpin the market.
The gains in agricultural markets were capped by concerns over global economic uncertainty which weighed on commodities, including oil and metals.
Asian shares and the euro steadied on Wednesday but lacked the impetus for a decisive rebound, as investors continued to fret about the looming “fiscal cliff” in the United States and a delay in releasing more aid to debt-stricken Greece.
“I think the US wheat crop condition is deteriorating which is quite bullish for the market,” said Ker Chung Yang, a senior investment analyst at Phillip Futures in Singapore. “But there is uncertainty in the market as macro-economic sentiment is getting weaker, which is keeping a lid on prices.”
Chicago Board of Trade’s most active January soybeans rose 0.8 percent to $14.19-1/4 a bushel by 0255 GMT, while December wheat added 0.1 percent to $8.52 a bushel. December corn gained 0.4 percent to $7.26-1/2 a bushel.
Crop ratings for the developing US wheat crop fell 3 percentage points, more than expected, to a new November low due to dry conditions in critical growing areas of the US Plains, according to the US Department of Agriculture.
The USDA said the crop was rated 36 percent good to excellent as of Nov. 9, down from 39 percent a week earlier. A year ago, the crop was rated 50 percent good to excellent.
Dry weather is expected to continue in the western portion of the US Plains hard red winter wheat region for the next 15 days, said Don Keeney, meteorologist for MDA EarthSat Weather.
Some eastern areas will receive showers, which will benefit the crop as it heads toward dormancy.
The US wheat is becoming more competitive in the world market as supplies from the Black Sea region shrink and Australia produces a smaller crop, traders said.
The soybean market was supported by expectations of a rebound in demand from China, the world’s top importer, after prices slid to their lowest since mid-June on Tuesday.
The USDA said export inspections of soybeans for the week ended on Thursday reached 64.1 million bushels, topping trade expectations for 53 million to 59 million bushels.
The National Oilseed Processors Association’s monthly soybean crush data scheduled for release on Wednesday should show the US crush for October at 147.713 million bushels, analysts projected.
If realized, the figure would mark the industry group’s biggest October crush since 2010 and the highest monthly total reported by NOPA since November 2010.
The USDA gave corn a slight boost by reporting that private exporters struck deals to sell 158,496 tonnes of US corn to unknown destinations.
Commodity funds bought 5,000 CBOT corn contracts on Tuesday, trade sources said. They bought 6,000 soybean and sold 3,000 wheat contracts.