GRAINS-Wheat higher for fourth session after USDA data

* USDA sees more wheat export demand, especially from China
    * Corn follows wheat up on expectations of feed demand
    * Soybeans higher on spillover strength, U.S. planting
    * Weaker dollar adds support to dollar-denominated grains

 (Updates with closing prices)
    By Julie Ingwersen
    CHICAGO, July 11 (Reuters) - U.S. wheat futures rose for a
fourth day on Thursday, as investors covered short positions
after the U.S. Department of Agriculture lowered its forecasts
of U.S. and global wheat stockpiles below trade expectations.
    Corn and soybean futures followed wheat higher, with
benchmark November soybeans also posting a fourth straight
gain. At the Chicago Board of Trade, wheat for September delivery settled up 4 cents at $6.83 per bushel, paring gains toward the close after reaching a two-week high of $6.93. New-crop December corn ended up 5-1/2 cents at $5.27 a bushel and new-crop November soybeans were up 6 cents at $12.90-3/4 a bushel. Wheat advanced after the USDA released monthly data during the trading session. In its July supply/demand report, the government lowered its forecast of 2013/14 U.S. wheat ending stocks to 576 million bushels from its forecast of 659 million in June and below the average analyst estimate of 632 million. The government cited expectations for increased export demand, especially from China. "The new-crop wheat carry-out number should be seen as pretty bullish," said Joe Vaclavik, president of Standard Grain in Chicago. "At 576 (million bushels), I don't think anybody was looking for a number that low. Exports are up, so there is your culprit," Vaclavik said. The USDA also slashed its forecast of global wheat ending stocks for 2013/14 to 172.38 million tonnes, from 181.25 million in June. If realized, the figure would be the smallest since 2008/09. China, the world's top wheat grower, is expected to import the highest volume of the grain in a decade in 2013/2014 after
its domestic harvest was damaged by bad weather, according to a forecast by China National Grain and Oils Information Centre, an official think tank. China bought more than 1.3 million tonnes of U.S. wheat in early July in a flurry of deals after U.S. prices fell to near the lowest levels in a year. Wheat and other grains also drew support from a sharp drop in the dollar, after comments from Federal Reserve Chairman Ben Bernanke indicated the U.S. central bank may not wind down its economic stimulus program as soon as previously expected. The U.S. dollar index was on track for a two-day decline of more than 2.2 percent, its biggest since 2009. A weaker dollar makes dollar-denominated commodities like grains cheaper to overseas buyers. As well, funds hold a net short position in CBOT wheat and corn, leaving those markets vulnerable to bouts of short-covering. CORN, SOYBEANS FOLLOW WHEAT HIGHER Corn followed wheat higher on tightening world stocks. The USDA lowered its forecast of global corn ending stocks for 2013/14 to 150.97 million tonnes, from 151.83 million in June, while the average analyst estimate was for 152.4 million. The USDA also pared its forecast of China's 2013/14 corn
harvest to 211 million tonnes, from 212 million previously. "I think the wheat demand showing up in China and the Chinese corn crop reduction of 1 million tonnes has the trade thinking that maybe the demand low in feedgrains is in," said Mike Zuzolo, president of Global Commodity Analytics in Lafayette, Indiana. Also supportive, USDA in a weekly report showed export sales of U.S. corn at 1.05 million tonnes, topping trade expectations for 350,000 to 600,000 tonnes. Soybeans rallied after dipping lower in response to the USDA raising its forecast of U.S. 2013/14 soybean production and ending stocks. The soy market rose on spillover strength from corn and wheat, as well as concerns about U.S. soybean crop development stemming from planting delays that have persisted from springtime into the summer. The USDA has projected 2013 soybean plantings at 77.7 million acres, but traders say planting delays due to excessive rain in parts of the Midwest may prompt the government to lower that figure later this year. "From an agronomy standpoint, there is concern about what if we have an early fall, or what if the plant shuts down," one Chicago analyst said. "Nobody wants to sell (soybeans) until we see the weather over the next 30 days." Prices at 2:35 p.m. CDT (1935 GMT) LAST NET PCT YTD CHG CHG CHG CBOT corn 560.75 7.00 1.3% -19.7% CBOT soy 1472.00 7.25 0.5% 3.8% CBOT meal 458.00 8.30 1.9% 8.9% CBOT soyoil 46.53 -0.49 -1.0% -5.3% CBOT wheat 683.00 4.00 0.6% -12.2% CBOT rice 1538.00 9.00 0.6% 3.5% EU wheat 199.25 1.75 0.9% -20.4% US crude 104.79 -1.73 -1.6% 14.1% Dow Jones 15,456 165 1.1% 18.0% Gold 1284.90 21.26 1.7% -23.3% Euro/dollar 1.3102 0.0128 1.0% -0.7% Dollar Index 82.6880 -1.3640 -1.6% 3.7% Baltic Freight 1139 9 0.8% 62.9% (Additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore; editing by David Gregorio and Jim Marshall)

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