August 22, 2014 / 3:13 AM / 6 years ago

GRAINS-U.S. soybeans face 2nd week of decline on supply pressure

* Soybeans down 0.7 pct this week on rising U.S. supply

* Corn gains for 2nd day as lower prices boost demand (Adds details, quotes)

By Naveen Thukral

SINGAPORE, Aug 22 (Reuters) - Chicago soybeans rose on Friday from contract lows as strong demand underpinned the market but the oilseed is still poised for a second week of decline on expectations of record U.S. production.

Corn gained around half a percent, rising for a second day with solid U.S. weekly exports helping recovery in a market that has lost 1.6 percent this week.

Chicago Board Of Trade November soybeans have given up 0.7 percent this week, while December corn is facing its first fall in three weeks.

“The agricultural markets are consolidating, I think we have seen the worst,” said Paul Deane, agricultural commodity strategist at ANZ in Melbourne. “We have seen the impact of large supplies and now it is more about moving the stuff out.”

November soybeans rose 0.6 percent to $10.44-1/4 a bushel by 0226 GMT on Friday and December corn added 0.5 percent to $3.70-3/4 a bushel.

Weekly U.S. soybean export sales last week were 1.3 million tonnes, according to the U.S. Department of Agriculture, higher than expectations for 850,000 to 1.15 million tonnes.

Corn export sales of 819,100 tonnes were within analysts’ estimates. Wheat export sales of 209,200 tonnes were below expectations.

The Pro Farmer Midwest Crop Tour projected the corn yield in the top growing state of Iowa at 178.75 bushels per acre, up from the average last year of 171.94 and well above the three-year average of 157.94, according to data provided by the tour.

It estimated the average number of soybean pods per 3-by-3-foot square for Illinois at 1,299, above last year’s tour average of 1,116. For western Iowa, the tour put the average number of pods at 1,091.

Results from the tour are giving traders confidence that the USDA will likely increase its yield forecasts in the coming months. Pro Farmer’s editors will release their estimates of total U.S. crop production later on Friday.

The wheat market is finding some support from lower production estimates in Canada, which competes with the United States for export business, and quality downgrade to crops in Europe.

Farmers in Canada are on course to produce less wheat than expected, according to Statistics Canada.

France, the EU’s top exporter, has been forced to import wheat as rain has hurt the quality of its crop.

December wheat rose 0.7 percent to $5.59-1/4 a bushel. For the week, wheat is down 0.6 percent, its second week of decline.

Prices at 0226 GMT Contract Last Change Pct chg Two-day chg MA 30 RSI CBOT wheat 559.25 3.75 +0.68% +1.68% 550.27 55 CBOT corn 370.75 1.75 +0.47% +0.88% 372.58 55 CBOT soy 1044.25 6.00 +0.58% +0.60% 1071.96 40 CBOT rice $12.82 $0.01 +0.08% -0.89% $13.02 47 WTI crude $93.80 -$0.16 -0.17% -2.36% $99.06 33 Currencies Euro/dlr $1.328 $0.000 -0.02% +0.16% USD/AUD 0.932 0.002 +0.22% +0.33% Most active contracts Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight RSI 14, exponential (Editing by Tom Hogue)

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