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Wheat gains, soyabeans slip

Chicago wheat rose more than 1 percent on Thursday, extending a rally triggered by Wednesday's US Department of Agriculture data that put the 2015 US crop below market estimates. Corn futures rose slightly on technical buying and spillover support from wheat. Soyabeans slumped on pressure from an advancing Midwest harvest and technical selling.

Chicago Board of Trade December wheat added 5-1/2 cents or 1.2 percent to $5.18-1/4 a bushel, after climbing 1.8 percent on Wednesday. Short-covering also lifted prices, even as US export sales fell below market forecasts. Weather concerns linger for wheat crops in Russia and Australia, said Bill Biedermann, trader at Allendale Inc. But for all three crops, if US yields continue to impress, "farmers are going to sell (at) these prices and the market will have ample pipeline supplies," Biedermann added.

The USDA report trimmed US production more than expected, while also putting quarterly stocks below the average trade estimate. "Heavy US inventories have weighed on prices. The report is a sign that the problem is being alleviated," Tobin Gorey, director of agricultural strategy at the Commonwealth Bank of Australia, said in a research note. But traders said the global wheat market remains defined by large supply and stiff export competition. The European Commission on Wednesday raised its monthly estimate of this year's soft wheat harvest in the European Union.

Russia, meanwhile, signed a decree to reduce a wheat export tax as of Thursday, raising the prospect of increased shipments. CBOT December corn added 1 cent to $3.88-3/4 a bushel. Corn export sales for 2015-16 totalled 748,200 tonnes in the latest week, in line with market forecasts.

November soyabeans shed 14-3/4 cents, or 1.6 percent, to $8.77-1/4, moving off a one-month high struck in the last session. "The (US soyabean) yields coming out right now are just unbelievable," said Karl Setzer, analyst at MaxYield Co-operative. "That more than anything is weighing on trade today."

Copyright Reuters, 2015