U.S. grains: Wheat falls on profit-taking; corn, soy firm

Chicago | Reuters — Chicago Board of Trade wheat futures fell on profit-taking on Friday, the day after they hit a 3-1/2 week high on concern about the condition of the U.S. winter crop, traders said.

Soybeans rose as traders positioned for a monthly U.S. government crop report due Monday that could indicate tighter U.S. stockpiles, while corn inched higher.

Thinly traded CBOT oat futures tumbled, a day after shooting to record highs this week amid transportation problems in Canada, a key supplier. The front oats contract settled down its daily 20-cent limit at $4.36-1/2 per bushel, after setting an all-time high overnight at $4.67-1/4 (all figures US$).

At the CBOT, March wheat settled down 3-1/4 cents at $5.77-1/2 a bushel.

March soybeans ended up 5-3/4 cents at $13.31-1/2 a bushel, and March corn was up 1-1/4 cents at $4.44-1/4 a bushel.

Wheat fell after trading higher for much of the session.

“The market lost momentum after a lack of news during the day trade,” said analyst Terry Reilly of Futures International.

Yet CBOT wheat still ended the week up nearly four per cent, its biggest weekly gain since September.

Wheat rallied after the U.S. Department of Agriculture on Monday reported a drop in monthly ratings of conditions in Kansas, the top U.S. producer of the crop. Analysts said dryness was a bigger worry than cold temperatures, even after storms this week brought beneficial snowfall to much of the region.

“The snow cover, I don’t think, was as good as expected as you get west of central Kansas and Nebraska,” said Mike Zuzolo of Global Commodity Analytics, based in Atchison, Kansas.

Soybeans up ahead of USDA

Soybeans firmed as traders positioned for the USDA’s monthly supply/demand reports on Monday. Most analysts surveyed by Reuters expected the USDA to lower its forecast of U.S. 2013-14 soybean ending stocks, reflecting strong export demand.

For the week, soybeans rose 3.8 per cent, the most since August, buoyed by continued export demand for U.S. supplies and concerns about the impact of recent dryness in Brazil. Brazil’s biggest grain cooperative, Coamo, said dry, hot weather has hurt the soy crop.

Extended forecasts called for wetter weather in Brazil late next week and beyond.

“There is rain on the way, but it’s still 10 days out,” Zuzolo said. “That suggests keeping the premium in the front end until those rains actually fall.”

Export demand supports corn

Corn drew support from fresh export demand, with USDA confirming sales of 141,200 tonnes from the United States to unknown destinations for delivery in the current marketing year.

Also, South Korean buyers purchased two cargoes of U.S. corn that had been rejected by China in a dispute about imports with unapproved genetically modified organisms. [Related story]

Strong corn export sales helped lift spot CBOT futures above $4.40 a bushel this week for the first time since late October. The market rose 2.4 per cent for the week, its third straight weekly gain.

The run-up triggered a flurry of U.S. farmer selling, but analysts said the export business could prompt the USDA to raise its 2013-14 corn export forecast on Monday.

“The most interest heading into the (USDA) report seems to be on corn, where demand has been steadily rising for the past several weeks,” said Karl Setzer, an analyst with MaxYield Cooperative in West Bend, Iowa. “An increase in corn exports would not be surprising.”

— Julie Ingwersen is a Reuters correspondent covering ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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