GRAINS-Wheat jumps on short-covering; corn, soy also climb
* Wheat becoming more competitive with corn in feed rations
* Corn and soybeans firm, led by new-crop contracts
* Trade eyes forecasts for hotter, drier weather in US Midwest
* U.S. Federal Reserve policy statement in focus
(Updates prices, adds analyst comments) CHICAGO, June 19 (Reuters) - U.S. wheat futures climbed 3 percent on Wednesday, on track for their biggest daily rise since April, on bargain buying and expectations of domestic demand for wheat as livestock feed, traders said. Corn and soybeans also advanced, led by new-crop contracts as forecasts for hit and dry weather later this month raised concerns about potential crop stress. At the CBOT as of 12:35 p.m. CDT (1735 GMT), July wheat was up 21-1/2 cents, or 3.1 percent, at $7.09 per bushel. July corn was up 7 cents at $6.80-1/4 a bushel, with new-crop December up 15 cents at $5.65-1/2. July soybeans were up 5-1/2 cents at $15.16-1/4 a bushel and new-crop November was up 17-1/4 at $13.07. Wheat was the biggest mover, gaining against corn as inter-market spreads corrected. Corn has gained against wheat in recent days, making wheat more attractive as a feed ingredient. "When you've stretched corn against wheat as far as you have, you have also encouraged additional domestic feed use in the wheat market. So we probably have some renewed interest from the feed sector," said Terry Linn, analyst with the Linn Group, a Chicago brokerage. As well, commodity funds hold a sizable net short position in CBOT wheat futures, leaving the market open to bouts of short-covering that can accelerate market moves. Some analysts also said the U.S. winter wheat harvest might be smaller than expected, following drought and spring freeze damage in the U.S. Plains and excessive rains in the Midwest. Farmers have been harvesting wheat in Texas and Oklahoma and while early yield reports were not as bad as expected, grain merchants have expressed concern that the remaining crop might be worse. "I think the trade is starting to find more disappointing yields that match up with the declining crop conditions. They are having to put premium back in the market," said Mike Zuzolo, president of Global Commodity Analytics in Lafayette, Indiana.
CORN UP ON WEATHER JITTERS Nearby corn futures rose for a fourth straight session, supported by firm cash markets, while back months advanced on forecasts for hot weather in the U.S. Midwest evoked memories of last year's historic drought. New-crop December corn hit a two-week high at $5.68-1/2, surging above its 100-day moving average of $5.51. "There is discussion of a high-pressure ridge for the last week of June and into July that is gaining momentum," Joe Davis, a vice president with Futures International, wrote in a note to clients. "The warm and dry weather may help crops in the short-term, but traders will keep a close eye on this as it may develop into a prolonged ridge and turn crop negative," it said. The market showed little reaction to bearish weekly ethanol numbers released by the U.S. Energy Information Administration. The agency reported that U.S. ethanol output fell by 11,000 barrels per day in the latest week, to 873,000 bpd, while ethanol stocks rose to 16.45 million barrels, up 458,000.
Traders were cautiously awaiting possible news about the U.S. Federal Reserve's next policy step. The Fed's two-day meeting ends on Wednesday with a policy statement and a news conference by Chairman Ben Bernanke.
SOYBEANS RISE ON ACREAGE ESTIMATE New-crop soybeans extended gains after private analytics firm Informa Economics estimated U.S. soybean plantings at 77.756 million acres (31.5 million hectares), down from its May forecast of 78.286 million but above the U.S. Department of Agriculture's figure of 77.1 million. "The new-crop beans have gotten a boost from the Informa numbers. The acreage increase was not as big as the trade was expecting," Zuzolo said. Informa cut its estimate for U.S. corn planted area to 95.262 million acres, below its May estimate of 96.827 million and the USDA's figure of 97.3 million. The USDA was scheduled to release updated planting figures on June 28. Wet weather slowed U.S. corn planting this spring, and analysts suspect farmers switched some of their intended corn acres to soybeans, which can be planted later. As of Sunday, U.S. farmers still had 15 percent of their soybean acres left to plant, the USDA said this week.
Prices at 12:52 p.m. CDT (1752 GMT)
LAST NET PCT YTD CHG CHG CHG CBOT corn 681.00 7.75 1.2% -2.5% CBOT soy 1519.50 8.75 0.6% 7.1% CBOT meal 451.90 0.10 0.0% 7.4% CBOT soyoil 49.45 0.64 1.3% 0.6% CBOT wheat 710.00 22.75 3.3% -8.7% CBOT rice 1626.00 -2.50 -0.2% 9.4% EU wheat 199.00 2.25 1.1% -20.5% US crude 98.38 -0.06 -0.1% 7.1% Dow Jones 15,301 -17 -0.1% 16.8% Gold 1373.10 5.31 0.4% -18.0% Euro/dollar 1.3406 0.0013 0.1% 1.6% Dollar Index 80.5380 -0.0740 -0.1% 1.0% Baltic Freight 995 33 3.4% 42.3%
(Additional reporting by Michael Hogan in Hamburg and Colin Packham in Sydney; editing by Keiron Henderson and Marguerita Choy)