October 3, 2016 / 3:17 AM / 10 months ago

GRAINS-Corn climbs to 1-week high on strong demand, wheat eases

* Corn hits highest since September 23 on lower stocks
    * Wheat eases on ample wold supplies, soybean tick up

 (Adds details, quotes)
    By Naveen Thukral
    SINGAPORE, Oct 3 (Reuters) - Chicago corn futures rose for a
second session on Monday, climbing to a one-week high as the
market was underpinned by lower-than-expected inventories in the
United States due to strong demand from animal feed makers.
    Wheat lost ground as an amply supplied global market kept a
lid on prices. 
    The Chicago Board of Trade's most-active corn contract
rose as much as 0.5 percent to $3.38-1/2 a bushel, the highest
since Sept. 23. 
    Wheat gave up 0.6 percent to $$3.99-1/2 a bushel and
soybeans added 0.2 percent to $9.56-1/4 a bushel. 
    "There is short-term bullish in the market due to U.S.
Midwest supply-demand situation," said Kaname Gokon at brokerage
Okato Shoji in Tokyo. "But the upside is limited as harvest of
record U.S. crop will boost supplies."
    Corn prices rose after the U.S. Department of Agriculture,
in a quarterly crop report on Friday said 1.738 billion bushels
of corn were in storage as of Sept. 1. 
    That was below the amount analysts had expected on average,
indicating that livestock producers had fed more corn to their
animals than anticipated. 
    The agency further fuelled ideas that livestock producers
had stuck with corn as feed, instead of switching to wheat, by
reporting that 2.527 billion bushels of wheat were in storage at
the start of the month. That topped analyst expectations.
    Still, the rally in corn futures is expected to be capped as
a record-sized harvest this autumn adds to supplies.
    Some traders and analysts had projected that wheat feeding
would increase in the past quarter because prices were under
pressure from massive global supplies.
    A surprise cut in the government's forecast for the 2016
spring wheat harvest in the United States has fanned concerns
supplies will be tight this season, buoying prices for the
top-quality grain and boosting its premium to lesser grades of
wheat.
    The USDA on Friday lowered its estimate of U.S. spring wheat
output, excluding durum, to 534 million bushels from 571 million
previously. The average estimate among analysts surveyed by
Reuters was for 570 million bushels.
    Large speculators increased their net short position in CBOT
corn futures in the week to Sept. 27, regulatory data released
on Friday showed. 
    The Commodity Futures Trading Commission's weekly
commitments of traders report also showed that noncommercial
traders, a category that includes hedge funds, increased their
net short position in CBOT wheat and cut their net long position
in soybeans.
    

 Grains prices at  0255 GMT
 
 Contract    Last    Change   Pct chg  Two-day chg  MA 30   RSI
 CBOT wheat  399.50  -2.50    -0.62%   +0.13%       405.01  49
 CBOT corn   337.50  0.75     +0.22%   +2.51%       332.38  61
 CBOT soy    956.25  2.25     +0.24%   +0.63%       965.48  43
 CBOT rice   9.91    $0.02    +0.20%   +1.38%       $9.76   62
 WTI crude   47.97   -$0.27   -0.56%   +0.29%       $45.75  63
 Currencies                                                 
 Euro/dlr    $1.123  -$0.001  -0.08%   +0.07%               
 USD/AUD     0.7653  0.000    -0.01%   +0.26%               
 Most active contracts
 Wheat, corn and soy US cents/bushel. Rice: USD per
 hundredweight
 RSI 14, exponential
 
 (Reporting by Naveen Thukral; Editing by Joseph Radford and
Richard Pullin)

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