November 8, 2012 / 3:47 AM / 5 years ago

GRAINS-US wheat eases from 5-week top, soy falls for 2nd day

* Wheat falls 0.6 pct after three days of gains
    * Global supply concerns to underpin wheat prices
    * Soy down for 2nd day, S.America weather weighs

 (Adds prices, details)
    By Naveen Thukral
    SINGAPORE, Nov 8 (Reuters) - U.S. wheat slid 0.6 percent on
Thursday as the market took a breather after climbing for three
consecutive sessions to a five-week top on concerns over global
supplies as dryness hurts U.S. crops and rains threaten the
Australian harvest.
    Soy lost more ground to trade near its lowest since
mid-October, with expectations of higher supplies from the
United States and favourable crop weather in South America
weighing on the market.
    The market is expecting the U.S. Department of Agriculture
to cut its estimates for global wheat production and increase
its forecast for U.S. soybean supplies in its monthly report due
on Friday.
    "We have seen cash wheat markets strengthen because of
quality concerns in Australia, Brazil and Argentina," said Brett
Cooper, a senior markets manager at INTL FCStone Australia.
    "There is a view that these quality issues in the southern
hemisphere will switch demand to the United States."
    Chicago Board of Trade December wheat fell 0.6 percent
to $8.88-1/4 a bushel by 0312 GMT, after climbing to $8.97 a
bushel on Wednesday, the highest since October 1.
    November soy slid 0.4 percent to $15.03-1/4 a bushel,
not far from Wednesday's three week low of $15.00-1/4 a bushel
and December corn lost 0.4 percent to $7.41-1/4 a bushel.
    Analysts were expecting the USDA's new view of global stocks
 to fall to 170.969 million tonnes from 173 million, according
to the average of estimates in a Reuters survey.
    The USDA cut its estimate of world wheat stocks, which were
198.17 million tonnes at the end of the 2011/12 crop year, by
3.71 million in its October report.
    The International Grains Council has already cut its
forecast for grain stocks at the end of the 2012/13 season by 4
million tonnes to 328 million, representing a fall of 44 million
tonnes, or 12 percent, from year-earlier levels.
    Australia, the world's second largest exporter, is expecting
a much smaller crop this year, with early harvest showing lower
protein scales and poor yields. Traders said rains forecast over
the nation's east coast could slow the harvest.
    Asia's top buyers, who rely on Australia for the bulk of
their milling wheat supplies, may be forced to import larger
volumes of high-protein spring wheat from the United States and
Canada.
    Speculative funds held a net short position on wheat
futures, which left prices prone to rallies as the noncommercial
traders covered those bearish bets. Wheat was also seen as a
bargain due to weakness in the commodity compared to soybeans
and corn in recent months.
    In the soybean market, the USDA is expected to again boost
the size of this year's soybean crop as harvest results around
the U.S. Midwest showed that damage from the worst drought in
more than 50 years was not as bad as initially feared.
    Favorable crop weather continues in southern Brazil, with
drier weather for the next 10 days boosting plantings, and
northern Brazil continues to get needed rainfall.
    Commodity funds bought 6,000 CBOT corn contracts on
Wednesday, trade sources said. They sold 3,000 soybean contracts
and bought 5,000 wheat. 
  
  Prices at 0312 GMT
  Contract        Last    Change  Pct chg  MA 30   RSI 
  CBOT wheat     888.25    -5.75  -0.64%   874.02   63
  CBOT corn      741.25    -3.00  -0.40%   766.62   44
  CBOT soy      1502.75    -4.25  -0.28%  1580.63   35
  CBOT rice      $15.30    $0.08  +0.49%   $15.48   52
  WTI crude      $84.84    $0.40  +0.47%   $88.81   41
  Currencies                                                
  Euro/dlr       $1.275   $0.046  +3.78%   
  USD/AUD         1.041   -0.014  -1.34%   
  Most active contracts
  Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight
  RSI 14, exponential
    

 (Reporting by Naveen Thukral; Editing by Clarence Fernandez)

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