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GRAINS-Soybeans to 6-month high ahead of USDA report
March 7, 2014 / 11:43 AM / 4 years ago

GRAINS-Soybeans to 6-month high ahead of USDA report

* Soybeans rally as export demand tightens supplies
    * Wheat to 3-month high on short covering, Ukraine jitters
    * Corn sets back from 6-month top on profit-taking
    * Monthly USDA supply/demand report due Monday

 (Adds closing prices, analyst comment)
    By Julie Ingwersen
    CHICAGO, March 7 (Reuters) - Chicago Board of Trade spot
soybean futures climbed to a six-month high on Friday as traders
adjusted positions ahead of a monthly U.S. government report
that is expected to show tighter U.S. soy stockpiles and smaller
South American crops.
    Wheat futures hit a three-month top on follow-through
technical buying after strong gains this week and jitters about
political instability in Ukraine, a major corn and wheat
    Corn fell as investors took profit and farmers sold more of
their stocks after the benchmark May contract rose above $5 a
bushel for the first time since September.
    Oat futures, which set an all-time high this week, plunged
their daily limit after the government in top exporter Canada
ordered the two major rail companies to ease a massive grain
backlog that has hurt farmers. CBOT May oats
 ended down 20 cents at $4.46-1/4 a bushel.
    Soybeans rose on unrelenting U.S. export sales and
expectations the U.S. Department of Agriculture, in a monthly
report due Monday, would raise its estimate of U.S. 2013/14 soy
exports and lower its ending stocks forecast.  
    CBOT soybeans for May delivery settled up 19-3/4 cents
at $14.57-3/4 a bushel, after reaching $14.60, a
life-of-contract high. The front March contract also
touched $14.60, the highest spot soybean price on a continuous
chart since Sept. 13.
    The market gained 3 percent for the week, its fifth
consecutive weekly advance.
    Export commitments of U.S. soybeans for the 2013/14
marketing year, which began on Sept. 1, 2013, have already
surpassed USDA's forecast. 
    "The latest data shows U.S. soybean exports remain very
strong and that there is a lack of significant cancellation by
Chinese importers, something that is often observed as the South
American crop comes online," said Luke Mathews, a commodities
strategist at Commonwealth Bank of Australia. 
    Analysts also expect the USDA to pare its estimates of the
soy crops in Brazil and Argentina following poor crop weather in
recent weeks. 
    CBOT wheat set a three-month high on continued technical
buying and short covering that lifted the market by 8 percent
this week, its biggest weekly gain since late July 2012.
    CBOT May wheat settled up 8 cents at $6.54 a bushel,
after reaching $6.63.  
    Commodity funds have been paring their net short position in
CBOT wheat since February. Open interest in the market this week
fell to the lowest in four years, reflecting the short covering.
    "We extended the life of the rally with the whole
Ukraine-Russian tension," said Shawn McCambridge, grains analyst
with Jefferies Bache in Chicago.
    "I think the fund short in Chicago has been pretty
well-covered," he said, adding, "from a fundamental point of
view, I think we have overdone this move."
    CBOT May corn closed down 2 cents at $4.89 a bushel
after reaching $5.02-1/2, its highest point since September,
prompting investors to book profit.
    Farmers have been aggressive sellers of corn this week but
country offerings slowed a bit Friday as cash basis levels in
the interior Midwest tumbled in response.
    For the week, front-month CBOT corn rose 5 percent,
the most in 10 months, buoyed by robust U.S. export sales and
the crisis in Ukraine.
    "We have had a pretty good run and a helluva lot of fund
buying since the first of the month. I think you are looking at
a little bit of risk aversion," said Jim Gerlach, president of
A/C Trading in Fowler, Indiana.
    "After a really strong week, people are taking their ball
and going home," Gerlach said of Friday's market downturn.

 Prices at 3:49 p.m. CST (2149 GMT)      
                              LAST      NET    PCT     YTD
                                        CHG    CHG     CHG
 CBOT corn                  489.00    -2.00  -0.4%   15.9%
 CBOT soy                  1457.75    19.75   1.4%   11.1%
 CBOT meal                  457.80     6.90   1.5%    4.6%
 CBOT soyoil                 44.32    -0.17  -0.4%   14.2%
 CBOT wheat                 654.00     8.00   1.2%    8.1%
 CBOT rice                 1531.00     2.50   0.2%   -1.3%
 EU wheat                   215.00     6.75   3.2%    2.9%
 US crude                   102.62     1.06   1.0%    4.3%
 Dow Jones                  16,453       31   0.2%   -0.7%
 Gold                      1339.64   -11.10  -0.8%   11.1%
 Euro/dollar                1.3873   0.0015   0.1%    1.6%
 Dollar Index              79.7100   0.0470   0.1%   -0.4%
 Baltic Freight               1543       63   4.3%  -32.2%

 (Additional reporting by Naveen Thukral in Singapore and
Sybille de La Hamaide in Paris; editing by Jason Neely, Jeffrey
Benkoe and Matthew Lewis)

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