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GRAINS-Corn firms as U.S. crop deteriorates, wheat falls
May 30, 2012 / 3:42 AM / 5 years ago

GRAINS-Corn firms as U.S. crop deteriorates, wheat falls

* Corn firm as USDA report show crop deterioration
    * U.S. wheat falls for five out of six sessions
    * Soy up for a 4th session on supply squeeze, demand

 (Adds details, quotes)	
    By Naveen Thukral	
    SINGAPORE, May 30 (Reuters) - Chicago corn edged up on
Wednesday, recouping some of last session's deep losses after a
government report showed deterioration in the condition of the
U.S. crop, while wheat fell for a fifth session out of six.	
    Soybeans rose for a fourth straight session, supported by
dryness in parts of the U.S. Midwest, tight supplies from South
America and strong Chinese demand.	
    Still, the gains in corn and soybean markets were capped by
pressure from the financial markets, which were hurt by fears
that Spain's banking woes will push up the country's borrowing
costs to unsustainable levels. 	
    "We have seen deterioration in crude oil values, which is
indicating another bout of risk aversion that is also evident by
the fact that the U.S. dollar is sharply higher," said Luke
Mathews, commodity strategist at Commonwealth Bank of Australia.	
    "It does appear in the grain markets that the outside
markets are providing an overwhelming direction."	
    Chicago Board of Trade July wheat slid 0.2 percent to
$6.55-3/4 a bushel by 0304 GMT, giving up more ground after
falling 3.4 percent in the last session.	
    July soybeans rose 0.2 percent to $13.89-3/4 per
bushel, while July corn rose 0.3 percent to $5.64 a
bushel.	
    The U.S. dollar index, which measures the strength of
the greenback against a basket of currencies, rose 0.1 percent,
making dollar-priced commodities expensive for importers.	
    On the fundamentals side, heat and a lack of rain is taking
a toll on the fledgling U.S. corn crop, with condition ratings
tumbling more than expected by analysts polled by Reuters.	
    The U.S. Department of Agriculture's weekly crop progress
report on Tuesday said that 72 percent of the crop was in
good-to-excellent condition, down 5 percentage points from a
week ago. Analysts polled by Reuters expected the crop's rating
to drop 2 to 4 percentage points. 	
    Farmers wrapped up corn plantings last week and were nearing
the end of soybean seedings at 89 percent complete because of
the record early start to plantings this season and overall
satisfactory weather so far during the season.	
    U.S. corn and soybean crops now need an urgent round of rain
and there are some forecasters calling for showers in the
Midwest this week.	
    Rains are forecast for the U.S. Midwest on Wednesday through
Friday, said Andy Karst, meteorologist for World Weather Inc.
Showers will be heaviest in areas west of the Mississippi River,
with parts of Iowa, Missouri and Nebraska receiving as much as 2
inches (5 cm).	
    Rain is also seen in portions of the lower Midwest,
providing critical relief to stressed corn crops in those areas,
although more will be needed to foster development. Traders said
rain was unlikely to penetrate the dry subsoils that were
slowing soybean emergence.	
    China is likely to raise soybean imports to 56.8 million
tonnes in the 2011/12 crop year despite recent shipment
cancellations because of a small domestic soy crop and rising
demand, oilseed analyst Oil World said.	
    Oil World also said Argentina's 2012 soybean crop could fall
as low as 39 million to 40 million tonnes due to drought and
flooding in the country, the third-largest soy producer.	
    Wheat prices came under pressure after reports of rain in
dry southern Russia since the weekend, with Russia's state
forecaster predicting more rainfall this week. 	
    Much-needed rainfall over the weekend across Australia's
eastern grain belt raised hopes of higher yields for the 2012/13
wheat crop as farmers in one of the world's top exporters wind
up planting, also weighing on wheat futures. 	
	
  Prices at  0304 GMT
  Contract        Last    Change  Pct chg  Two-day chg MA 30   RSI 
  CBOT wheat     655.75    -1.00  -0.15%    -3.57%     640.23   51
  CBOT corn      564.00     1.50  +0.27%    -2.51%     607.10   27
  CBOT soy      1389.75     3.00  +0.22%    +0.56%    1434.46   46
  CBOT rice      $14.28    $0.03  +0.18%    -1.59%     $15.28   23
  WTI crude      $90.27   -$0.49  -0.54%    -0.65%     $97.76   26
  Currencies                                                
  Euro/dlr       $1.246  -$0.008  -0.63%    -0.85%
  USD/AUD         0.979   -0.007  -0.66%    -0.25%
  Most active contracts
  Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight
  RSI 14, exponential
 	
 (Editing by Himani Sarkar)

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