* U.S. wheat up for 4th day, highest since early April
* Wheat crop outlook dims in Russia, EU, United States
* Big sale to China boosts soybeans
(Updates with closing U.S. prices)
By Rod Nickel and Mark Weinraub
WINNIPEG, Manitoba/CHICAGO, May 17 (Reuters) – U.S. wheat
rose o n Thursday to the highest level in six weeks, as dry
conditions threatened production in Russia and the U.S. southern
Plains.
Soybeans climbed for a third straight session, boosted by
news of a large sale to China, and corn firmed on spillover
strength.
Chicago Board of Trade July wheat rose 19 cents or 3
percent to $6.57-3/4 a bushel, after climbing 5 percent in the
last session, its biggest rally in 6-1/2 weeks.
The contract peaked at $6.58-1/2, the highest level for the
front month since April 5, and closed above its 100-day moving
average.
Spring drought conditions in parts of Russia’s key southern
grain export regions may have inflicted irreversible damage on
some of the crop, and a government source told Reuters that
Russia may cut its 2012/13 grain crop forecast in May from the
current 94 million tonnes.
“I can’t call (the price increase) overdone because the
conditions are still worsening” in Russia, said Dan Manternach,
wheat analyst at Doane Advisory Services, adding that hot, dry,
windy weather is expected to hit Russian wheat over the next
seven to 10 days.
“It’s already in tough shape and now it’s going to get
blasted with a sauna.”
Analyst Strategie Grains said winter damage to wheat in the
European Union was more severe than previously thought, leading
it to slash again its forecast for this year’s crop in the
27-country EU.
Concern that hot, dry weather this week could hurt the
maturing hard red winter wheat crop in Kansas
also contributed to the advance.
In parts of Oklahoma, harvesting is under way, however,
suggesting that unfavorable weather may have little impact on
some of the U.S. wheat crop, said Dale Durchholz, senior market
analyst at Agrivisor Services in Bloomington, Illinois.
“I’m a little hesitant to get too excited about that
(weather concern). The harvest is here, folks, and whatever the
crop is, it is.”
Limited rainfall is expected in key hard red winter
wheat-growing areas of the U.S. Plains during the next 10 days,
although Oklahoma and southeastern Kansas could see a few storms
at the weekend, said Joel Widenor, meteorologist for Commodity
Weather Group.
Further support for wheat came from short-covering and U.S.
weekly export sales, which exceeded expectations, totaling
711,400 tonnes of old and new crop combined.
Chicago Board of Trade July soybeans gained 16 cents
or 1.1 percent to stand at $14.38 a bushel, touching a six-day
high.
The U.S. Department of Agriculture in its daily reporting
system confirmed sales of 480,000 tonnes of U.S. soybeans to
China, the biggest oilseed buyer, for 2011/12 delivery.
“You just gave everybody another shot in the arm here,
that’s really what chased the market higher,” Durchholz said.
The Agriculture Department reported export soybean sales for
the latest week at 673,300 tonnes, sharply below trade
estimates. However, nearly all of the total was for old-crop
delivery, helping drive the July contract’s premium over
new-crop November to about $1.25 per bushel.
CBOT July corn gained 5 cents or 0.8 percent at $6.25
a bushel, exceeding the rise in deferred months.
Favorable weather in the U.S. Midwest continued to boost the
outlook for this year’s U.S. corn crop, with planting nearly
complete.
The USDA reported weekly corn export sales of 865,100
tonnes, below forecasts for 900,000 to 1.3 million tonnes.
Prices at 1:59 p.m. CDT (1859 GMT)
LAST NET PCT YTD
CHG CHG CHG
CBOT corn 625.00 5.00 0.8% -3.3%
CBOT soy 1438.00 16.00 1.1% 20.0%
CBOT meal 428.00 3.00 0.7% 38.3%
CBOT soyoil 50.72 0.29 0.6% -2.6%
CBOT wheat 657.75 19.00 3.0% 0.8%
CBOT rice 1526.50 15.00 1.0% 4.5%
EU wheat 207.25 4.00 2.0% 2.3%
US crude 92.46 -0.34 -0.4% -6.4%
Dow Jones 12,509 -88 -0.7% 2.4%
Gold 1573.71 35.41 2.3% 0.6%
Euro/dollar 1.2712 -0.0002 0.0% -1.8%
Dollar Index 81.3820 0.0110 0.0% 1.5%
Baltic Freight 1137 0 0.0% -34.6%
(Reporting by Rod Nickel in Winnipeg, Manitoba and Mark
Weinraub in Chicago; Editing by Dale Hudson and Alden Bentley)
