GRAINS-U.S. corn up 2.9 percent, leads wheat and soy higher
* China deal, ethanol demand add to technical corn rally * Rains to slow U.S. corn seeding over the next week * July soybeans highest since October on 5th day of gains (Updates with closing prices, adds new analyst quote) By Mark Weinraub CHICAGO, May 22 (Reuters) - U.S. corn and wheat futures rallied on Wednesday on a bargain-buying bounce after prices fell to multiweek lows earlier this week, traders said. Soybean futures also rose, following the strength in grains, with the front-month contract gaining 1.1 percent on speculative buying, its fifth straight day of gains despite weakness in the cash market. Chicago Board of Trade corn notched the biggest increase, 2.9 percent, receiving additional support from export sales to China and signs of burgeoning ethanol demand. Prices for the benchmark July contract broke through key resistance points, such as its 50-day moving average. "All we are seeing here right now is a little bit of technical recovery," said Karl Setzer, a commodity trading adviser at MaxYield Cooperative in West Bend, Iowa. CBOT July corn futures settled up 18-1/2 cents at $6.58-1/2 a bushel, while CBOT July wheat was 8 cents higher at $6.88-1/2 a bushel. On Tuesday, CBOT corn hit its lowest price since April 8 on a continuous basis, while wheat dropped to its lowest level since April 3. CBOT July soybeans were up 16 cents at $14.94-1/4 a bushel. The July contract peaked at $14.95, its highest since Oct. 1. Private exporters reported the sale of 360,000 tonnes of U.S. corn to China, the U.S. Agriculture Department said on Wednesday morning. Another 180,000 tonnes was sold to an unidentified buyer which traders said was likely China since it is the only country that typically buys such large quantities at one time. The U.S. Energy Information Administration said on Wednesday that weekly U.S. ethanol output rose 18,000 barrels per day to 875,0000 barrels and stocks fell to 16.19 million barrels. "Getting those corn sales this morning to China basically gave us a really good value level that says the world has an appetite at these price levels," said Bill Gentry, a broker at Risk Management Commodities in Lafayette, Indiana. "We got an additional boost when we got the ethanol numbers." Lingering concerns about crop development this summer added support to corn, even after U.S. farmers' most active planting week ever allowed them to finish the bulk of their corn seeding. USDA pegged corn planting at 71 percent complete as of Sunday, up from 28 percent a week earlier. Still, much of the corn was seeded after May 15. That raises the risk of the crop pollinating this summer under the stress of high temperatures, which could reduce yields. "The positive sowing figures do not mean that all is over yet. And as we have seen in past years, a lot can still happen to the U.S. corn crop," Commerzbank analyst Carsten Fritsch said. "This worry is also helping to support corn prices today." Additionally, some rain showers could cause temporary delays to the final planting push during the next 10 days. "Overall it looks like they'll make decent progress, more so in the lower Midwest than in the Dakotas, though," said Andy Karst, meteorologist for World Weather Inc. Rains were moving from the western Midwest into the east on Wednesday. It will be drier Thursday and Friday, followed by more showers by the weekend, Karst added. Prices at 1:50 p.m. CDT (1850 GMT) LAST NET PCT YTD CHG CHG CHG CBOT corn 658.50 18.50 2.9% 1.9% CBOT soy 1494.25 16.00 1.1% 24.7% CBOT meal 440.60 2.30 0.5% 42.4% CBOT soyoil 49.64 0.16 0.3% -4.7% CBOT wheat 688.50 9.50 1.4% 5.5% CBOT rice 1534.00 16.00 1.1% 5.0% EU wheat 205.75 1.75 0.9% 1.6% US crude 94.22 -1.96 -2.0% -4.7% Dow Jones 15,354 -34 -0.2% 25.7% Gold 1360.26 -15.18 -1.1% -13.0% Euro/dollar 1.2835 -0.007 -0.5% -0.8% Dollar Index 84.3460 0.4820 0.6% 5.2% Baltic Freight 829 -1 -0.1% -52.3% In U.S. cents, benchmark contracts, except EU wheat (euros) and soymeal (dollars). CBOT wheat, corn and soybeans per bushel, rice per hundredweight, soymeal per ton and soyoil per lb. (Additional reporting by Sam Nelson in Chicago and Michael Hogan in Hamburg; editing by Jim Marshall and John Wallace)
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