UPDATE 1-GRAINS-Wheat touches 7-month low as weather improves
* Snow, rains improve U.S. wheat output prospects
* Corn enters 9th straight day of losses
* Better Argentine crop weather weakens
* Soybeans pressured by better South American outlook
(Recasts with renewed price weakness in European trade, dateline pvs NEW DELHI) HAMBURG, Feb 13 (Reuters) - Chicago wheat prices fell on Wednesday, touching a new seven-month low, as rain and snow helped improve U.S. harvest prospects. Corn entered its ninth straight day of losses, and soybeans also fell on expectations of larger-than-expected harvests in South America. Both corn and soybeans were also still being weighed down by Friday's U.S. Department of Agriculture (USDA) report, which forecast better-than-expected global supplies in coming months. "We are seeing downward pressure today on wheat from the improved weather forecasts in the U.S., while soybeans are again pressured by the better weather outlook in Argentina," said Ole Hansen, head of commodity strategy at Saxo Bank. "The markets are still being pressured by the continued spillover from the USDA report on Friday, which has triggered some long liquidation," he added. "Corn is also being weakened as attention turns to the better crop outlook this year, with new crop contracts now 20 percent below old crop prices." Chicago Board of Trade March wheat fell 0.8 percent to $7.25-1/2 a bushel by 1240 GMT after touching $7.23-1/2, below the previous seven-month low of $7.25-1/2 seen on Tuesday. Chicago March corn fell 0.9 percent to $6.90 a bushel to register its longest losing streak in 5-1/2 years. December corn was down 0.6 percent at $5.59-1/4 a bushel. March soybeans fell 0.8 percent to $14.09 a bushel, giving up earlier gains in Asian trade and touching the lowest nearby price since Jan. 15.
Snow and rain showers were moving across the U.S. Southwest Plains grain belts, which will ease but not eliminate the harmful impact on wheat production from the worst drought in more than 50 years, U.S. agricultural meteorologist Don Keeney Weather said on Tuesday. "Predictions of rainfall in key U.S. wheat growing areas that have been characterized by drought have been weighing on wheat prices," Commerzbank said in a note. "The corn price has been affected by the prospect of rainfall in Argentina, which likewise looks set to improve crop conditions from the second half of the month." Corn and soybean prices reached record highs in 2012 as drought ravaged U.S. growing areas. But prices fell back as U.S. crops turned out better than feared and large looming Brazilian and Argentine harvests in early 2013 look set to ease global supplies. "Investors seem to want to play the grains and soybean markets from the cautious side, but the facts as presented by the USDA continue to show a slightly brighter picture than built up by traders," Saxo Bank's Hansen said. Prospects for large South American crops caused Goldman Sachs on Monday to cut its price forecasts for both corn and soybeans. The investment bank also lowered its outlook for wheat prices due to low demand for U.S. exports.
Traders also noted growing dissatisfaction at high U.S. old crop corn prices, with South Korea's largest feedmaker NOFI excluding U.S. grain from an international tender to purchase up to 195,000 tonnes of corn, as U.S. corn was seen as not acceptable due to price and quality concerns. "The crisis drought of 2012 now looks like being followed by good South American crops and prospects of a normal U.S. harvest and importers want to see prices marked down to reflect this," one European trader said. The market will look to fresh planting estimates from the USDA at its annual forum late next week. The acreage estimates could be even larger than the USDA's baseline projections released on Monday, observers say.
The USDA projects U.S. corn output to rise 34 percent to a record 14.4 billion bushels this year, assuming a return to normal weather and yields after droughts stunted output in 2012.
* Prices at 1140 GMT
Product Last Change Pct Move End 2011 Ytd PctParis wheat 232.50 -4.00 -1.69 195.25 19.08 London wheat 201.50 -2.35 -1.15 153.65 31.14 Paris maize 221.25 -4.50 -1.99 197.25 12.17 Paris rape 453.75 -5.50 -1.20 421.50 7.65 CBOT wheat 725.25 -6.75 -0.92 671.25 8.04 CBOT corn 688.00 -7.50 -1.08 654.75 5.08 CBOT soybeans 1396.25 -13.25 -0.94 1207.75 15.61 Crude oil 97.70 0.19 +0.19 98.83 -1.14 Euro/dlr 1.3490 * All grain and oilseed prices for second position. Paris futures
prices in Euros per tonne, London wheat in pounds per tonne and CBOT in cents per bushel.
(Additional reporting by Mayank Bhardwaj in New Delhi, editing by Jane Baird)