US wheat prices rise as drought fears mount

; US wheat prices rose on Friday, clawing back from some of their steep losses this week on concerns about drought in key winter wheat growing areas and technical buying. Corn also gained strength, but soybeans continued their slide toward their biggest weekly loss in nearly a year as fears of a possible global recession lingered over the markets.
Drought has plagued the US Plains hard red winter wheat region and 80 percent of the Ukraine's winter grain-sowing area. "The rains in the Plains have had decent coverage but they've been a little bit disappointing in terms of their amounts," said Jerrod Kitt, analyst at The Linn Group in Chicago. "You've got drought in Argentina, drought fears in Ukraine, they're all helping (wheat) recover here."
Chicago Board of Trade wheat for December delivery added 11 cents, or 1.7 percent, at $6.44-3/4 a bushel by 9:55 am CDT (1455 GMT), in a technical bounce after falling to a 2-1/2 month low on Thursday. It was still on track for its fourth straight weekly loss.
CBOT December corn also climbed after touching its lowest price in 12 weeks. The contract gained 2-3/4 cents, or 0.4 percent, to $6.52-3/4 a bushel, bouncing off key support at the contract's 200-day moving average. Despite the gain, nearby corn stayed on pace for its fourth straight weekly decline.
"All of a sudden demand is picking up and I think we'll close higher," said Matt Pierce, analyst for GrainAnalyst.com. "Fundamentals are more bullish now than they were early in the week." Corn supplies are tight, and the trade likely wants to avoid short positions for next Friday's US Department of Agriculture stocks report. "Macros were saying 'get me out' but there has been a lot of commercial scale-down buying of everything," said Paul Haugens, vice president for Newedge USA. "There has been a big change in ownership from the specs to the consumer this week." CBOT November soybeans continued their slide, losing 10 cents, or 0.8 percent, to $12.73 a bushel.
They were on pace for a 6.1 percent weekly loss in the nearby contract, its largest in nearly a year. Liquidation of long positions pressured the soy market, after large speculators raised their net long position in early September to the highest level in nearly seven months.
Ample South American soybean supplies also weighed on the prospects of US new-crop sales. China, the world's top soy importer, is expected to ship larger volumes from Brazil and Argentina in the fourth quarter, which is typically the peak marketing season for the US soybeans.
Economic gloom continued to hang over commodity markets as talk of a possible Greek default gained pace on Friday. A pledge by the world's major economies to prevent Europe's debt crisis from undermining the global economy failed to lift financial markets for long.