GRAINS-Soy firm on demand outlook, wheat hits new 6-month low
* Soy firms on prospects of better Chinese demand
* U.S. wheat extends fall to new 6-month low
* Market eyes South American soybean weather
(Adds details, quotes) PARIS/SINGAPORE, Dec 27 (Reuters) - Chicago soybeans rose on Thursday with support from expectations of a rebound in Chinese demand, while wheat extended its fall to a new six-month low on poor U.S. exports and year-end fund liquidation. Corn was down after closing 1.6 percent lower in the last session in light trade that was curtailed by the holiday season. "We are pretty bullish on beans for the first quarter next year as crush margins improve in China and the U.S. balance sheet tightens," said Victor Thianpiriya, an agricultural strategist at ANZ in Singapore. "But the technical picture is pretty weak so you could see some better entry points." Chicago Board Of Trade March soybeans added 0.37 percent to $14.23-3/4 a bushel as of 1138 GMT. March wheat was 0.39 percent lower at $7.71-1/2 a bushel, after dropping to $7.71-1/4 a bushel earlier, the lowest since early July. March corn shed 0.47 percent to $6.90 a bushel. The soybean market was underpinned by hopes for strong Chinese demand, as crush margins improve in the world's top buyer. The USDA on Wednesday confirmed sales of 115,000 tonnes of U.S. soybeans to China and another 108,000 tonnes to unknown destinations, both for delivery in 2012/13. The USDA reported weekly export inspections of U.S. soybeans at 44.486 million bushels, above a range of trade estimates for 37 million to 42 million. The soybean market has been weighed down in recent weeks by forecasts of record production in South America, where crops are experiencing largely favourable weather. Last week, Brazil's vegetable oils association Abiove raised its soy crop forecast by 300,000 tonnes, to a record 81.6 million tonnes. The wet areas of Argentina were expected to turn drier in the next two weeks, easing concerns about excess moisture, while welcome rains were forecast later this week and next week for parts of central Brazil. On the physical front, the U.S. Department of Agriculture reported the amount of wheat inspected for export in the latest week at 15.128 million bushels, within a range of trade estimates for 12 million to 17 million. "U.S. wheat exports haven't been strong although prices are becoming more competitive," said Thianpiriya. U.S. soft red winter wheat, the type traded at the CBOT, has become the cheapest milling wheat in the world, with the absence of fresh export sales keeping a lid on futures prices. Traders were monitoring crop weather in the southern U.S. Plains hard red winter wheat region, where cold temperatures this week raised the threat of crop damage from winterkill. Temperatures in northwest Kansas were in the single digits Fahrenheit (minus 12 to minus 17 Celsius) on Wednesday morning. The Commodity Weather Group (CWG) reported sub-zero (Fahrenheit) temperatures from parts of Colorado into the northern Plains in the past two days, but said protective snowpack would limit any crop damage. In Europe, Paris-based milling wheat futures fell more than 2 percent after a two-and-half-day Christmas break, following the drop in Chicago and pressured
Benchmark March was down 2.36 percent at 248.50 euros a tonne after hitting 248.75 euros earlier, still higher than the five-month low of 245.25 euros hit last week.
Prices at 1138 GMT
Product Last Change Pct Move End 2011 Ytd PctCBOT wheat 771.50 -3.00 -0.39 652.75 18.19 CBOT corn 690.00 -3.25 -0.47 646.60 6.71 CBOT soy 1424.00 5.50 +0.39 1198.50 18.82 Paris wheat 248.50 -6.00 -2.36 195.25 27.27 Paris maize 237.00 -5.00 -2.07 197.25 20.15 Paris rape 452.00 -3.00 -0.66 421.50 7.24 WTI crude oil 91.01 0.03 +0.03 98.83 -7.91 Euro/dlr 1.33 0.00 +0.31 1.30 2.39 * CBOT futures prices are in cents per bushel, Paris futures in
euros per tonne, WTI crude oil in dollars per barrel.
(Additional reporting by Valerie Parent; Editing by Anthony Barker)