IKAR in Mass and Industry Media

Wheat, corn steady after slide as USDA report looms

Business Recorder

PARIS/SINGAPORE: Chicago wheat edged higher on Wednesday to come off a 3-1/2 month low as the run-up to monthly U.S. government forecasts encouraged the market to take a breather after a recent slide on good harvest prospects in the northern hemisphere.

Corn edged higher, after slipping to a near four-month low on Tuesday, as traders squared positions ahead of the U.S. Department of Agriculture's supply-and-demand estimates due at 1600 GMT.

Soybeans ticked lower after rising in the previous session on expectations the USDA will further trim already-tight U.S. stocks.

Chicago Board of Trade July wheat had climbed 0.5 percent to $6.04 a bushel by 1132 GMT, after dropping to its lowest since Feb. 28 at $5.98-1/4 earlier in the day.

"There will be a bit of buying at these levels as wheat is bordering the point for being oversold," said Paul Deane, senior agricultural economist at ANZ Bank in Melbourne.

"It can break below $6.00 a bushel as there is still a bit of fund length in the market, but by Q3 or Q4 we will get to the $6.50 to $6.80 level, which is probably reasonable value."

Front-month wheat has fallen about 18 percent since hitting a one-year high at $7.35 a bushel on May 6 on prospects for plentiful global supplies and stiff export competition as the northern hemisphere readies for harvest.

The global picture has offset worries about weather-worn U.S. hard red winter wheat.

Analysts expect the USDA to cut its 2014 U.S. winter wheat crop estimate, but the consensus also calls for the USDA to raise its forecast of U.S. 2014/15 wheat ending stocks by 2.2 percent to 552 million bushels, from 540 million in May.

Wheat markets could find upside from emerging crop risks in Russia and Australia.

The Institute for Agricultural Market Studies (IKAR) said on Tuesday it had cut its estimate for the Russian wheat crop due to dry conditions and that the extent of rains forecast this week would be important for harvest prospects.

Australia lowered its forecast for 2014/15 wheat production by nearly 1 percent on Wednesday as dry weather curbs yields, and warned output could fall further if an El Nino weather pattern forms.

Chicago July corn added 0.3 percent to $4.46-3/4 a bushel, after falling on Tuesday to $4.44-3/4 a bushel, the lowest since mid-February.

Bearish sentiment due to favourable growing conditions for U.S. corn has been exacerbated by news that China has stopped issuing permits for imports of distillers dried grains (DDGs) from the United States on concerns they might contain an unapproved genetically-modified organism (GMO).

CBOT July soybeans were little changed, edging up 0.01 percent to $14.63-1/2 a bushel.

17.06.14

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