January 10, 2013 / 4:28 AM / 5 years ago

GRAINS-Corn extends gains, wheat jumps on US winter crop concern

* Corn up 0.4 pct, wheat rises 0.5 pct, soy ticks up
    * Tight supplies support corn ahead of USDA report
    * Wheat underpinned by concerns over U.S. winter crop
    * China's December soy imports at second highest ever

 (Adds details, quotes)
    By Naveen Thukral
    SINGAPORE, Jan 10 (Reuters) - Chicago corn rose around half
a percent on Thursday, building on this week's gains as tight
global supplies underpinned the market, while wheat bounced back
on support from dry weather threatening the U.S. winter crop.
    Soybeans edged higher but the market remained under pressure
on forecasts of bumper production in South America and
expectations of a slowdown in Chinese imports following the
second largest monthly purchases on record in December. 
    Front-month corn has risen 2.5 percent in four
consecutive sessions of gains on positioning ahead of a key U.S.
Department of Agriculture report that is expected to show tight
global supplies.
    In its final report on U.S. 2012 crop production, the USDA
on Friday is expected to estimate last year's drought-decimated
corn crop at a six-year low. 
    "Technically corn is looking the best as it has bounced from
lows and the supply pipeline is quite tight," said Victor
Thianpiriya, an agricultural strategist at ANZ in Singapore.
"The basis levels are very strong."
    Chicago Board of Trade March corn rose 0.4 percent to
$6.96-3/4 a bushel by 0357 GMT. March soybeans gained 0.2
percent to $13.88 a bushel while March wheat added 0.5
percent to $7.49-1/2 a bushel.
    Spot basis bids for corn held at historically high levels
for this time of year, supported by drought-reduced stockpiles
and slow farmer sales. 
    The wheat market was lifted by concerns over the U.S.
drought hurting the winter crop.
    The government declared much of the central and southern
U.S. wheat belt a natural disaster area on Wednesday due to
persistent drought that imperils this year's winter wheat
harvest. 
    In its first disaster declaration of the new year, the
agriculture department made growers in large portions of four
major wheat-growing states - Kansas, Colorado, Oklahoma and
Texas - eligible for low-interest emergency loans.
    The four states grew one-third of the U.S. wheat crop last
year. Kansas was the No. 1 state at 382 million bushels.
    There was additional support for wheat with rising demand
from China. Wheat mills in China, the world's top consumer and
producer of the staple, have resumed imports from the United
States and Canada, spurred by record domestic prices.
 
    China has bought several cargoes of high-protein wheat from
the U.S. and Canada over the past few days and import orders are
expected to increase as local supplies stay tight until May,
when the new harvest hits the market.
    Soybeans ticked up, tracking corn and wheat higher but the
market is likely to face pressure from forecasts of record
Brazilian production and slowing Chinese imports.
    China bought 5.89 million tonnes of soybean in December, the
second-highest monthly total after June 2010, as crushers
stepped up imports ahead of February's Lunar New Year holiday,
customs data showed. 
    But the nation is likely to scale back soybean purchases by
more than third in January and February after buying unusually
large amounts, with a drop in poultry consumption also
signalling dulling appetite. 
    "Going forward, I won't be surprised to see a little bit of
slowdown, as China has started cancelling cargoes and there are
Lunar New Year holidays," said ANZ's Thianpiriya.

  Prices at  0357 GMT
  Contract        Last    Change  Pct chg  MA 30   RSI 
  CBOT wheat     749.50     4.00  +0.54%   869.39   24
  CBOT corn      696.75     2.50  +0.36%   765.13   49
  CBOT soy      1388.00     2.50  +0.18%  1576.81   52
  CBOT rice      $15.23   -$0.01  -0.03%   $15.48   50
  WTI crude      $93.49    $0.39  +0.42%   $89.10   76
  Currencies                                                
  Euro/dlr       $1.305   $0.076  +6.17%    
  USD/AUD         1.054   -0.001  -0.09%    
  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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