GRAINS-U.S. wheat eases on way to 3rd straight weekly gain
* Corn demand seen boosted by widening discount to wheat
* Soy, corn set for weekly losses as U.S. harvest advances
(Updates prices; adds analyst quotes; changes byline, dateline, previously LONDON) CHICAGO, Oct 4 (Reuters) - U.S. wheat futures edged lower on Friday but were hovering near a 3-1/2 month high and headed for their third straight weekly gain amid tightening global supplies and strong demand. Soybean and corn futures were each narrowly higher in light volume at the Chicago Board of Trade, bolstered by rains that delayed harvest in the United States. "It's a hangover day for wheat," said analyst Austin Damiani of Frontier Futures in Minneapolis. "It's been a pretty exciting two weeks for wheat traders, and today it seems like we're consolidating." The wheat crop in major exporter Ukraine may decline by a third in 2014 due to heavy rains during the planting season, the country's agriculture minister said. Rains earlier this year damaged the wheat crop in top grower China, while frost hampered wheat in Argentina and Brazil. All this led to increased export demand from the United States and Canada. This year's Canadian wheat crop will be the largest ever, but the estimate of 33.026 million tonnes was within analysts' expectations, according to data released by Statistics Canada.
"(StatsCan) was at the high end of expectations but pretty much what we were thinking," Damiani said. Benchmark CBOT December wheat was 1-1/4 cents lower at $6.88 per bushel at 10:33 a.m. CDT (1533 GMT), on pace for a weekly gain of about 0.5 percent. Gains of more than 9 percent during the last three weeks are the biggest in more than a year. CBOT December corn edged 2 cents higher to $4.41-1/4 but was still near its three-year low from earlier this week, pressured by the ongoing harvest of a record U.S. crop. Soybeans for November delivery gained 3-1/4 cents to $12.91-1/2, just above their recent 19-month low. Corn was supported in part by a correction in the closely monitored wheat-corn spread. Wheat earlier this week hit a premium of $2.50 per bushel of corn - the biggest since September 2010. Corn's big discount will lead more animal feeders to turn to that grain instead of wheat, which they used heavily earlier this year. "The potential glut of corn from the U.S., EU and Black Sea - when available - will compete with and shift demand away from wheat in feed diets," said David Sheppard, managing director of UK merchant Gleadell. Commerzbank also expected a shift in demand. "It is doubtful whether the price differential between wheat and corn will widen much further," Commerzbank said. "For, given the already substantial price difference, corn is likely to be substituted for wheat to meet demand for animal feed." Wet weather into the weekend and another storm system late next week will slow harvesting of the 2013 U.S. corn and soybean crops, an agricultural meteorologist said. The ongoing shutdown of the U.S. government - including the Agriculture Department - is likely to delay the release of the U.S. harvest report on Monday and, possibly, the agency's monthly supply and demand report due in a week.
Prices at 10:33 a.m. CDT (1533 GMT)
LAST NET PCT YTD CHG CHG CHG CBOT corn 441.25 2.00 0.5% -36.8% CBOT soy 1291.50 3.25 0.3% -9.0% CBOT meal 425.40 -2.40 -0.6% 1.1% CBOT soyoil 40.00 -0.01 0.0% -18.6% CBOT wheat 688.00 -1.25 -0.2% -11.6% CBOT rice 1502.00 12.00 0.8% 1.1% EU wheat 194.00 -1.00 -0.5% -22.5% US crude 103.53 0.22 0.2% 12.8% Dow Jones 15,024 28 0.2% 14.7% Gold 1310.21 -6.48 -0.5% -21.7% Euro/dollar 1.3594 -0.0023 -0.2% 3.0% Dollar Index 79.9050 0.1560 0.2% 0.2%
(Additional reporting by Nigel Hunt in London and Naveen Thukral in Singapore; Editing by Lisa Von Ahn)