SINGAPORE: Chicago soybeans rose half a percent on Thursday with expectations of a rebound in Chinese demand supporting the market, while wheat edged higher after sliding to a six-month low on poor US exports and bearish technical signals.
Corn ticked up after closing 1.6 percent lower in the last session in light trade that was curtailed by the year-end holiday season.
"We are pretty bullish on beans for the first quarter next year as crush margins improve in China and the US balance sheet tightens," said Victor Thianpiriya, an agricultural strategist at ANZ in Singapore. "But the technical picture is pretty weak so you could see some better entry points."
Chicago Board Of Trade March soybeans added 0.5 percent to $14.25-1/2 a bushel as of 0332 GMT and March corn gained 0.3 percent to $6.95 a bushel.
March wheat rose 0.3 percent to $7.76-1/2 a bushel, after dropping to $7.71-1/4 a bushel earlier on Thursday, the lowest since early July.
The soybean market was underpinned by hopes for strong Chinese demand, as crush margins improve in the world's top buyer.
The USDA on Wednesday confirmed sales of 115,000 tonnes of US soybeans to China and another 108,000 tonnes to unknown destinations, both for delivery in 2012/13.
The USDA reported weekly export inspections of US soybeans at 44.486 million bushels, above a range of trade estimates for 37 million to 42 million.
The soybean market has been weighed down in recent weeks by forecasts of record production in South America, where crops are experiencing largely favourable weather.
Last week, Brazil's vegetable oils association Abiove raised its soy crop forecast by 300,000 tonnes, to a record 81.6 million tonnes.
The wet areas of Argentina were expected to turn drier in the next two weeks, easing concerns about excess moisture, while welcome rains were forecast later this week and next week for parts of central Brazil.
The wheat market, which has been pressured by bearish technical indicators, could be due for a rebound, according to Reuters market analyst Wang Tao.
A Fibonacci retracement analysis of the rise from the June 15 low of $6.69 to $9.48-1/4 reveals support at $7.75-1/2, which may trigger a rebound towards $8.00.
On the physical front, the US Department of Agriculture reported the amount of wheat inspected for export in the latest week at 15.128 million bushels, within a range of trade estimates for 12 million to 17 million.
"US wheat exports haven't been strong although prices are becoming more competitive," said Thianpiriya.
US soft red winter wheat, the type traded at the CBOT, has become the cheapest milling wheat in the world, with the absence of fresh export sales keeping a lid on futures prices.
Traders were monitoring crop weather in the southern US Plains hard red winter wheat region, where cold temperatures this week raised the threat of crop damage from winterkill. Temperatures in northwest Kansas were in the single digits Fahrenheit (minus 12 to minus 17 Celsius) on Wednesday morning.
The Commodity Weather Group (CWG) reported sub-zero (Fahrenheit) temperatures from parts of Colorado into the northern Plains in the past two days, but said protective snowpack would limit any crop damage.
Center>Copyright Reuters, 2012
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