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GRAINS-Wheat, corn and soybeans drift down ahead of USDA reports

* Cautious trade ahead of USDA sowings, stocks reports

* Wheat still near highest level since June

* Dry weather in U.S. Plains threatens supply prospects

(Recasts with price weakness in European trade, adds comment) HAMBURG/SINGAPORE, March 26 (Reuters) - Chicago wheat, corn and soybeans all edged lower on Wednesday as traders adjusted positions ahead of next week's government forecasts of U.S. spring sowings and grain inventories, estimates that can spark big price moves. The U.S. Department of Agriculture (USDA) announces its spring plantings and quarterly grain stocks reports on Monday. "I think the markets are drifting down in advance of the USDA spring planting and stocks estimates on Monday," said Ole Hansen, head of commodity strategy at Saxo Bank. "The spring USDA forecasts are traditionally among those which can cause heavy market volatility, so we are seeing positioning ahead of them." Chicago Board Of Trade May wheat fell 0.6 percent to $7.03-1/2 a bushel by 1153 GMT. May corn was down 0.6 percent at $4.83-1/2 a bushel and May soybeans were down 0.4 percent at $14.21-1/2 a bushel. Investors who have made bullish bets on agricultural commodities for most of the year are now reluctant to expand those positions ahead of the USDA reports, traders said. Analysts polled by Reuters expect the USDA to raise its estimates for soybean planted area at the expense of corn. "Unless we get presented with some additional supporting news from the weather or exports, there is a risk that we could see the markets drift down in advance of the USDA reports on Monday, considering that wheat, corn and soybeans are all currently at somewhat elevated levels," Hansen said. Wheat remained underpinned by concern about dryness in the U.S. Midwest. Chicago wheat has risen about 18 percent this month, and the most-active May contract is near its highest since June as dry weather threatens the U.S. winter crop, although supply prospects in other exporting countries look brighter. "The forecast is for poor rainfall for the hard red winter belt, particularly the southern (U.S.) Plains," said Luke Mathews, commodities strategist at Commonwealth Bank of Australia. "We want to see seasonal conditions in the U.S. improve, but we must understand that the global wheat market is bigger than just the United States and global supply prospects still look relatively attractive (strong supply) for the 2014/15 season." Warmer weather is forecast in the U.S. corn belt, while rain is expected on Wednesday in the parched winter wheat belt in the southern U.S. Plains, an agriculture meteorologist said. But soil temperatures are still too cold for farmers in most areas to begin planting corn, said Drew Lerner, a meteorologist with World Weather Inc. The U.S. corn market is also under pressure from China's continued rejection of cargoes because of an unapproved variety of genetically modified grains. Some importers have elected to continue adding to corn inventories before the USDA reports, with South Korea's NOFI buying 189,000 tonnes of corn from the United States and South America on Wednesday following a Taiwanese purchase of 150,000 tonnes reported on Tuesday. Grains prices at 1153 GMT

Contract Last Change Pct chg Two-day chg MA 30 RSI CBOT wheat 703.50 -4.75 -0.67% -1.54% 647.80 61 CBOT corn 483.50 -3.00 -0.62% -1.33% 472.73 54 CBOT soy 1421.00 -7.00 -0.49% -0.32% 1394.73 54 CBOT rice $15.37 $0.03 +0.23% -0.97% $15.61 49 WTI crude $99.46 $0.27 +0.27% -0.14% $100.98 48

Currencies

Euro/dlr $1.3795

Most active contracts. Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight, RSI 14, exponential

(Reporting by Michael Hogan and Naveen Thukral; editing by Jane Baird)