April 5, 2012 / 1:21 AM / 6 years ago

GRAINS-Wheat ticks up after losses, market eyes crop-weather

* Wheat edges up after near 3 pct decline, corn firm

Crop scouts calculate yields in a Kansas wheat field on the first day of their tour of the U.S. Plains hard red winter wheat region in Central Kansas, May 3, 2011. REUTERS/Mark Weinraub

* Crop-friendly weather in U.S. weighs on wheat, corn

* Weaker dollar supports commodities

By Naveen Thukral

SINGAPORE (Reuters) - Chicago wheat edged higher on Thursday as the market took a breather following an almost 3 percent fall in the last session, triggered by crop-friendly weather in the United States and Europe.

Corn was little changed after closing lower on Wednesday with a strong start to the U.S. planting season easing concerns over tight old-crop supplies.

“Follow‑up rain is expected for France over the Easter weekend and rains are also forecast for Germany and Britain,” said Luke Mathews, commodities strategist at Commonwealth Bank of Australia in Sydney in a report.

“There are favorable crop conditions in the U.S.”

Chicago Board of Trade May wheat rose 0.2 percent to $6.40-1/2 a bushel by 0354 GMT, while May corn gained half a cent to $6.57-1/4 a bushel.

A weaker U.S. dollar, which makes greenback-priced commodities competitive, also supported grain markets. The dollar index .DXY was down 0.1 percent.

Rainfall covered much of the U.S. Plains hard red winter wheat region this week, giving a further boost to the crop that has already entered the growing season with high ratings.

Rain fell in most of France on Wednesday and forecasters predict more showers, notably in the large grain belts in northern France.

Private analytical firm Informa estimated the 2012/13 U.S. winter wheat crop at 1.631 billion bushels, up from 1.494 billion a year earlier, adding further pressure to the wheat market.

The market is awaiting results from a tender issued by Egypt, the world’s top importer, which is seeking an unspecified amount of wheat from global suppliers for May 21-31 shipment.

A strong start to U.S. corn plantings and near-perfect weather have kept a lid on corn prices which rallied after a U.S. Department of Agriculture report on Friday showed stocks at a five-year low.

Meteorologists are forecasting drier weather in the next couple of weeks which should boost corn plantings, adding further pressure to new-crop prices amid expectations for the largest seedings in 75 years.

Soybean futures, which have jumped almost 7 percent in March, rose for a second straight day on expectations of lower plantings in the United States and concerns over tight supplies following a drought in Brazil and Argentina.

Soybeans for May delivery added 0.3 percent to $14.23-1/4 a bushel.

Informa pegged the Brazilian soy crop at 66.5 million metric tons (73.3 million tons), down from its previous estimate of 68 million, trade sources said. It also cut its Argentine soybean production outlook to 45 million metric tons from 47.5 million.

Still, analysts said the rally in soybean may be running out of steam.

“It has broken past the psychological level of $14 a bushel, and now the question is how much higher it can go?” said Abah Ofon, commodities analyst at Standard Chartered in Singapore. “After the rally soybean prices are looking favorable for planting as compared with corn.”

In its quarterly report, the USDA in predicted U.S. farmers would plant 2 percent less acreage of the oilseed than expected, while estimating highest corn plantings in 75 years.

Reporting by Naveen Thukral; Editing by Sugita Katyal

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