Tuesday, 25 March 2014 09:49
SINGAPORE: Chicago wheat rose for a second straight session on Tuesday, inching towards to its highest in almost 11 months, as forecasts for dry weather across the US grain belt stoked worries about tighter supplies.
Corn was little changed, after posting its biggest rally in three weeks in the previous session, as China's rejection of more US corn capped gains. Soybeans gained for a sixth session out of seven on strong demand and shrinking US supplies. The condition of wheat in the US Plains worsened in the latest week because of parched soils, with little relief in sight for the production area as the crop emerges from dormancy.
The US agriculture department's National Agricultural Statistics Service said in a weekly report that wheat in Kansas, the largest producer of the grain, was rated 33 percent good to excellent as of March 23, down from 34 percent a week earlier.
Chicago Board Of Trade May wheat rose 0.2 percent to $7.15-3/4 a bushel by 0308 GMT, after rallying 3 percent on Monday. The front-month contract is moving closer to last week's highest since late April 2013.
May corn was unchanged at $4.90 a bushel, having gained more than 2 percent in the previous session, while May soybeans added 0.4 percent to $14.31-1/4 a bushel.
"If it does stay dry in the US Plains, certainly we see some support for wheat," said Paul Deane, agricultural commodity strategist at ANZ in Melbourne.
The corn market came under pressure from China's cancellation of US shipments which highlights slowing demand in one of the world's top grain and oilseed consumer. "I think corn is at a risk of any sort of pull back here," said Deane. "I wouldn't necessarily want to be long here." China's quality watchdog at the northern city of Tianjin turned away 21,800 tonnes of US corn after detecting an unapproved genetically modified corn strain, the official Xinhua news agency reported late on Monday.
The latest incident put the country's total rejection of corn shipments from the United States, the world's largest exporter, at 908,800 tonnes since November.
The corn was turned away because the shipments contained MIR 162 corn, a GMO strain developed by Syngenta AG, which is not approved for import by China's agriculture ministry.
Analysts say China has been cutting imports also because of a slowdown in domestic demand and ample supplies from the domestic harvest last year.
The strong pace of US soybean exports continue to underpin prices of the oilseed. The US Agriculture Department said on Monday that weekly export inspections of soybeans were 732,132 tonnes.
The weekly data showed that soybean export shipments put the US exporters on pace to top USDA's annual target by 270 million bushels, analysts said.
Corn export inspections came in at 1.143 million tonnes, topping forecasts for 850,000 to 1 million tonnes.Copyright Reuters, 2014