October 3, 2016 / 1:27 AM / a year ago

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

SINGAPORE, Oct 3 (Reuters) - Chicago corn futures rose for a
second session on Monday, with prices 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. 
    * 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 what 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
    * 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.
    * Asian shares began the new quarter cautiously firmer on
Monday, while sterling took a spill as Britain set a March
deadline to start divorce proceedings from the European Union.
0755 Germany Markit/BME manufacturing PMI Sep 
0800 Euro zone Markit manufacturing PMI final Sep 
1400 U.S. Construction spending Aug 
1400 U.S. ISM manufacturing PMI Sep

 Grains prices at  0114 GMT
 Contract    Last    Change   Pct chg  Two-day chg  MA 30   RSI
 CBOT wheat  399.75  -2.25    -0.56%   +0.19%       405.02  50
 CBOT corn   338.25  1.50     +0.45%   +2.73%       332.40  63
 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   47.85   -$0.39   -0.81%   +0.04%       $45.75  62
 Euro/dlr    $1.123  -$0.001  -0.11%   +0.04%               
 USD/AUD     0.7646  -0.001   -0.10%   +0.17%               
 Most active contracts
 Wheat, corn and soy US cents/bushel. Rice: USD per
 RSI 14, exponential

 (Reporting by Naveen Thukral; Editing by Joseph Radford)

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