* Hot in U.S. Southwest, frost in Midwest
* Turn to dry weather in some European wheat areas
* China buying talk continues to lift corn
* Profit-taking in soybeans after run to near 4-year high
(Updates prices, adds details of supportive wheat fundamentals,
details corn spreading, adds insight into China soy buying,
fresh analyst quotes)
By Sam Nelson
CHICAGO, April 26 (Reuters) – U.S. wheat rose 1 percent on
Thursday as temperature extremes in different parts of the
country posed a threat to domestic wheat output, while in
Europe, a turn to warm and dry weather in some wheat areas
exacerbated concerns about crop damage.
Wheat prices were further fuelled by an International Grains
Council forecast for 2012/13 global wheat output at 676 million
tonnes which was 5 million tonnes below its previous estimate.
And net U.S. export sales of wheat last week at 744,100
tonnes were above analysts’ estimates, according to the U.S.
Department of Agriculture’s (USDA) weekly export sales report.
Spot corn was firm on persistent talk that China had
purchased more corn from the United States while new-crop
December turned down on bull-spreading. Traders bought
old-crop months amid tight stocks and sold the new-crop
contracts on outlooks for a big jump in corn stocks next year.
The popular July/December corn spread / widened
nearly 10 cents per bushel and at 12:08 p.m. CDT (1708 GMT) was
at 68-1/2 cents, premium July compared with 59-1/2 cents,
premium July the previous day.
Soybeans eased in subdued trade on profit-taking as prices
appeared “toppy” following a run to near 4-year highs.
At 12:09 p.m. CDT (1709 GMT) CBOT wheat for May delivery
was up 7-1/2 cents per bushel at $6.24, May corn was
up 7-1/4 at $6.18-1/4 and May soybeans were down 3 at
$14.70-1/2.
Traders and analysts mentioned weather concerns following a
spike in temperatures in the U.S. Southwest hard red winter
region at mid-week and a forecast for frost this weekend in the
eastern Midwest soft red winter wheat region.
Hot weather in the southwest Plains with temperatures up to
100 to 110 F in West Texas on Wednesday threatened the heading
wheat crop, according to Commodity Weather Group. (CWG)
“That kind of a temperature spike certainly bears watching.
Short-term I don’t see it doing much because they’ve had good
rains but if it continues for an extended time there could be a
problem,” said Shawn McCambridge, analyst for Jefferies Bache.
While the U.S. Southwest sweltered, a cold snap posed a
threat to wheat and corn crops in the northern and eastern U.S.
Midwest crop region.
CWG said frost was expected overnight Thursday around the
Great Lakes and even colder temperatures were expected overnight
Saturday posing a low-to-moderate freeze threat for Michigan,
Ohio and northern Indiana. CWG estimated 10 percent of the soft
red winter wheat region would be threatened by the frost.
Heat and drier weather also was a mounting concern in
portions of Europe’s wheat belt.
“Dryness is likely to extend from northeast Europe into
Western Russia during the next 10-days. Soil moisture shortages
will first develop in eastern Ukraine and South Russia,
encompassing one-third of the winter wheat belt,” CWG said.
Soybeans eased after trending higher early in the trading
session as the USDA, in its weekly export sales report on
Thursday, said U.S. soybean exports last week at 1.4 million
tonnes were above the high end of a range of analysts’ estimates
for 1.3 million.
China, the world’s largest soy importer, bought nearly 60
percent of the weekly total.
“The sales to China for old-crop are pretty big for this
time of the year. It was the fourth largest weekly sale to China
for the marketing year and here we are (in the marketing year)
where the sales should be coming from South America and not
here,” said Anne Frick, oilseeds analyst for Jefferies Bache.
Harsh weather in South America, the world’s largest soy
exporter, trimmed crop production shifting contra-seasonal
business to the United States.
The Buenos Aires Grains Exchange on Thursday pegged
Argentina’s soybean production at 43.0 million tonnes below
their previous outlook for 44.0 million.
There are some forecasts for output to fall even lower than
the Exchange’s estimate.
Prices at 12:13 p.m. CDT (1713 GMT)
LAST NET PCT YTD
CHG CHG CHG
CBOT corn 618.25 7.25 1.2% -4.4%
CBOT soy 1471.00 -2.50 -0.2% 22.7%
CBOT meal 414.90 1.00 0.2% 34.1%
CBOT soyoil 55.30 -0.35 -0.6% 6.2%
CBOT wheat 624.00 7.50 1.2% -4.4%
CBOT rice 1561.00 -13.50 -0.9% 6.9%
EU wheat 211.00 -1.50 -0.7% 4.2%
US crude 104.44 0.32 0.3% 5.7%
Dow Jones 13,152 61 0.5% 7.6%
Gold 1658.56 14.58 0.9% 6.1%
Euro/dollar 1.3236 0.0015 0.1% 2.2%
Dollar Index 78.9140 -0.0980 -0.1% -1.6%
Baltic Freight 1148 11 1.0% -33.9%
(Reporting by Sam Nelson;editing by Sofina Mirza-Reid)
