Reuters: US Dollar Report: GRAINS-Wheat export bounce stalls in hesitant market

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GRAINS-Wheat export bounce stalls in hesitant market Jan 28th 2013, 12:58 Mon Jan 28, 2013 7:58am EST * Wheat extends Friday gains then edges lower * Grain markets weigh weather risks, supply recovery * U.S. wheat underpinned by rising exports, drought By Gus Trompiz and Naveen Thukral PARIS/SINGAPORE, Jan 28 (Reuters) - Chicago wheat futures turned lower on Monday as a higher dollar and subdued equity markets curbed a rebound triggered by better-than-expected U.S. exports last week. The tentative trend also reflected uncertainty in grain markets that are weighing up crop conditions in North and South America and whether this will allow an expected recovery in global supply after weather-hit harvests in the past year. Wheat on the Chicago Board of Trade added 1 percent on Friday in the wake of the higher-than-anticipated weekly U.S. export sales, which added to fundamental support from a drought affecting part of the U.S. wheat belt. "Wheat exports sales data was impressive and there are issues with the crop in the United States because of dry weather," said Ker Chung Yang, senior investment analyst at Phillip Futures in Singapore. The U.S. Department of Agriculture on Friday reported export sales of U.S. wheat at 647,500 tonnes, including 572,500 tonnes for the current marketing year that began June 1, 2012. The combined-year total topped a range of trade expectations for 350,000 to 550,000 tonnes. In the drought-affected U.S. Plains, parts of the central and southeastern Plains should receive precipitation in the first half of this week, although rainfall will be too light for notable drought relief, the Commodity Weather Group said. But after rising another half a percent in Asian trading hours on Monday, Chicago Board of Trade March wheat was down 0.3 percent at $7.74 a bushel by 1233 GMT. CBOT March soybeans added 0.1 percent to $14.43 a bushel. March corn rose 0.2 percent to $7.22. A rise in the dollar index and a slip in equity markets, as investors turned more cautious after gains in sharp prices since the start of the year, pressured grains in the absence of fresh supportive news. MARKET WEIGHS CROP WEATHER Wheat also remained capped by corn, which fell on Friday and was little changed on Monday, as operators reacted to rain forecasts for dry areas in major corn producer Argentina. The market broadly expects large corn and soybean harvests in South America in the coming months but every twist in the weather is being scrutinised at a time of low global supply. The outlook in the United States, meanwhile, is being clouded by a persisting drought that has parched winter wheat plants and could raise risks for spring-planted corn and soy. "The grains market is currently caught between confidence and scepticism," Commerzbank analysts said. Analysts polled by Reuters see Chicago corn prices falling by 22 percent, soybeans by 17 percent and wheat by nearly 13 percent as world supply is expected to recover. The soybean futures found support in firm cash prices and talk that China will need to source higher volumes from the U.S. as infrastructure bottlenecks delay shipments from Brazil, which is on track for a record crop this year. "The soybean market is looking forward to China buying more beans from the U.S. as buyers expect port congestion in Brazil to delay cargoes," Ker said. Big trading houses are dispatching an armada of ships to Brazil hoping for a good spot in line to load up a record soybean crop. Brazil's crop is 30 percent bigger than last year's, which is good news for importers, but the South American farming giant added no new capacity to its ports despite projections that it would overtake the United States as the largest producer of soy. In Europe, benchmark March milling wheat in Paris adjusted to the movements in U.S. wheat prices since Friday, adding 0.2 percent to 247.75 euros a tonne. Paris futures remained curbed by the euro, which stayed in sight of an 11-month high versus the dollar struck on Friday. * Prices as of 1233 GMT Product Last Change Pct Move End 2012 Ytd Pct CBOT wheat 774.00 -2.50 -0.32 778.00 -0.51 CBOT corn 722.00 1.25 +0.17 698.25 3.40 CBOT soybeans 1443.00 2.00 +0.14 1418.75 1.71 Paris wheat 247.75 0.50 +0.20 250.25 -1.00 Paris maize 238.00 1.00 +0.42 237.75 0.11 Paris rape 479.75 3.75 +0.79 456.25 5.15 Crude oil 95.81 -0.07 -0.07 91.82 4.35 Euro/dlr 1.34 0.00 -0.15 1.30 3.74 * All contracts front month except third month for London wheat. Paris futures prices in Euros per tonne, London wheat in pounds per tonne and CBOT in cents per bushel. Link this Share this Digg this Email Reprints

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