US wheat rises for second day on Fed move

CHICAGO: US grain futures rose on Wednesday as the Federal Reserve's pledge to keep interest rates near zero for the next two years bolstered investor confidence in the markets.

Traders also evened positions on ahead of the Department of Agriculture's supply-demand report on Thursday that will provide the first survey-based estimates for corn and soybean production this year.

Wheat for September delivery rose 2.1 percent in the second day of gains after a five-sessions losing streak, climbing 13-3/4 cents to $6.85-3/4 per bushel at the Chicago Board of Trade and touching nearly a one-week high.

"I think the Fed statement will give a boost to overall commodity markets as it is more like injecting confidence into the markets," said Ker Chung Yang, analyst at Phillip Futures in Singapore.

However, sharply lower equities cast a shadow over the grains market.

"The dominant influence is the (crop) report and the outside markets are under pressure here, so everyone has a cautious attitude," said Don Roose, analyst at US Commodities in West Des Moines, Iowa.

"Odds favor a negative crop report on corn," Roose added.

Analysts expect the government to decrease estimates of the US corn crop in the report on Thursday but the crop would still be the second-largest ever.

CBOT September corn was up 4-3/4 cents at $6.83 per bushel while November soybeans edged up 1-1/4 cent to $13.00.

"I bet we get thin and choppy by the end of the day," said Jeff Thompson, broker at ABN Amro in Chicago, adding that the gains would likely hold until the close.

Rain showers and moderate temperatures were forecast in the US for the next two weeks, which should benefit the developing corn and soybean crops but could pressure prices for the commodities.

"We're looking at nonthreatening weather for the next week to 10 days, with rains on Friday and Saturday in the Midwest from 0.50 to 0.75 inch and isolated larger amounts," said John Dee, meteorologist for Global Weather Monitoring.

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