GRAINS-Soy leaps most in 7 months on Argentina woes, China demand
* Soybeans up 3.0 pct on poor rains in Argentina
* Market cites China buying after Lunar New Year break
* Slow shipments from Brazil also supportive
* Wheat and corn falter on improved U.S. crop weather
* India sale of wheat weighs on wheat market
(Updates prices, adds technical moves) CHICAGO, Feb 19 (Reuters) - U.S. soybeans jumped 3 percent on Tuesday, notching the biggest advance in seven months, on concerns about crop prospects in Argentina following disappointing rainfall and as China returns to the buy-side of the soybean market. Soybeans also gained support from slow shipments from Brazil as well as technical buying on follow-through from an upturn late last week after the market had hit a one-month low on commodity fund long-liquidation. "We saw a shift in momentum late last week so it's technical and also the rains in Argentina, particularly in the south, were disappointing," said Sterling Smith, futures specialist for Citigroup. Argentina is the world's third-largest exporter of soybeans after the United States and Brazil and is the world's largest exporter of soyoil and soymeal. Spot March soybeans fell to a one-month low on Thursday then reversed course on Friday to close near the session high. When trading resumed this week, the bellwether contract initially broke above resistance at its 50-day moving average of $14.38 per bushel and then penetrated key resistance at the 100- and 200-day moving averages of $14.56 and $14.57, respectively. "China bought some old-crop beans and seeing them come back in, I think, was supportive as well," Smith added. The U.S. Department of Agriculture said exporters had sold 120,000 tonnes of U.S. soybeans to China for delivery during the current old-crop (2012-13) marketing year. Corn and wheat turned downward on improved crop weather prospects in the United States while wheat found extra pressure from a big export sale by India. Wheat and corn farmers are banking on more rain and snow in late February so they can keep nursing depleted soil back to healthier levels of moisture amid the worst drought in the U.S. grain belt in more than 50 years. Agricultural meteorologists said the precipitation expected in the next week to 10 days will provide significant relief for crop prospects in the U.S. Plains and Midwest. John Dee, a meteorologist for Global Weather Monitoring, said "this will really help add to soil moisture levels."
Wheat also was pressured by a large sale of 750,000 tonnes of wheat as Indian traders jumped in to take advantage of attractive global prices. The sale is seen as a precursor of overseas sales for the harvest that will begin in March.
"Soybeans are the main price driver today with support coming from concern about the lack of rain in Argentina, which could reduce yield potential for the upcoming Argentine soybean crop," said Rabobank analyst Erin FitzPatrick. "There has been some rain in Argentina, but it is still not enough and more wet weather is needed." At 11:50 a.m. CST (1750 GMT), Chicago Board of Trade March soybeans were up 48-1/2 cents per bushel at $14.73, March corn was down 3-3/4 cents at $6.95 and March wheat was down 10-1/4 at $7.32. Chicago March soymeal jumped 4.47 percent to $427.70 a ton. "Soymeal is also very firm today as Argentina is the world's largest soymeal exporter and any reduction in the expected soybean crop would have an impact on soymeal export availability," FitzPatrick added. The rain that had been expected to bring relief to wilting Argentine soybean and corn crops over the weekend was lighter than expected, raising the prospect of lower yields in the 2012-13 harvest set to start in coming weeks. Importers are urgently hoping Brazil and Argentina will replenish tight global supplies with their large new crops in early 2013 following a devastating drought in the United States last year.
Prices at 11:53 a.m. CST (1753 GMT):
LAST NET PCT YTD CHG CHG CHG CBOT corn 695.25 -3.50 -0.5% 7.5% CBOT soy 1,472.75 48.25 3.4% 22.9% CBOT meal 427.70 18.30 4.5% 38.2% CBOT soyoil 52.47 0.85 1.7% 0.7% CBOT wheat 732.00 -10.25 -1.4% 12.1% CBOT rice 1,578.50 -5.00 -0.3% 8.1% EU wheat 244.75 -1.00 -0.4% 20.9%US crude 95.85 -0.01 0.0% -3.0% Dow Jones 14,023 41 0.3% 14.8% Gold 1,603.94 -5.61 -0.3% 2.6% Euro/dollar 1.3385 0.0034 0.3% 3.4% Dollar Index 80.4940 -0.0860 -0.1% 0.4% Baltic Freight 738 -9 -1.2% -57.5%
(Additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore; editing by G Crosse)