PARIS/SINGAPORE: Chicago wheat edged higher for a second session on Wednesday as the run-up to the Thanksgiving holiday prompted investors to cover short positions in a market that has been weighed down by brimming global supplies.
A decline in US wheat crop conditions and market chatter about radioactive pollution reported in Russia have encouraged some short-covering, but analysts said there was little impetus yet for a price rally in wheat.
Corn and soybeans also ticked higher ahead of the US Thanksgiving break, which will see Chicago markets closed on Thursday before reopening for a shortened session during US hours on Friday.
Background concerns about dry conditions in Argentina, and growing expectations of a La Nina weather event in the coming months, were lending some support to corn and soy.
The Chicago Board of Trade most-active wheat contract was up 0.3 percent at $4.42-1/2 a bushel by 1154 GMT. CBOT corn inched up 0.1 percent to $3.45-1/2 a bushel and soybeans added 0.5 percent to $9.93-3/4.
"The wheat market has already made lows but that doesn't mean prices should rally," said an India-based agricultural commodities analyst.
"There has been some discussion about dryness in the United States, but it is still too early to impact the crop."
The US Department of Agriculture (USDA), in a report released late on Monday, rated 52 percent of US winter wheat good-to-excellent, down from 54 percent the previous week, contrary to analyst expectations for no change.
The meteorological service in Russia, the world's biggest wheat exporter, said on Tuesday it had measured pollution of a radioactive isotope at nearly 1,000 times normal levels in the Ural mountains.
That marked the first official Russian data supporting reports that a nuclear incident had taken place in Russia or Kazakhstan in the last week of September, although scientists said there were no human or environmental risks.
"With net short positions at a high level, such reports may prompt short-term-oriented market participants to reshuffle their investments," Commerzbank analysts said in a note.
A series of import tenders has lent some support to prices, while potential weather threats in the southern hemisphere have also encouraged the market to consolidate.
Australia's Bureau of Meteorology issued an alert for a La Nina weather event starting next month, saying the chance it would take place was triple the normal likelihood.
In the United States, meanwhile, wet corn crop after a rain-hampered harvest was boosting premiums for dry grain and raising costs for exporters already facing cheaper South American competition.
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