GRAINS-U.S. wheat drops on dollar, weather outlook

* Wheat falls to near one-week low on dollar, weather
* Soy down 0.4 pct, falls from 26-month peak
* Corn extends losses, down 0.7 pct to a two-week low
* EU wheat weaker, follows U.S. down
(Adds European session, updates prices, dateline pvs SINGAPORE)
By Michael Hogan
HAMBURG, Nov 10 (Reuters) – Chicago wheat futures slid almost one percent on Wednesday to a near one-week low as a firmer tone for the dollar and an outlook for rains in U.S. winter crop areas weighed on the market. >>>>> More

Wheat Declines on Signs Grain Demand to Ease, Benefical Weather Forecast

Wheat futures fell, erasing earlier gains, on speculation that grain demand will ease after prices jumped almost 10 percent last week. 

Wheat dropped in tandem with corn futures. Both grains are used in livestock feed. Corn declined as much as 2.3 percent following a 16 percent jump in the previous three sessions after the U.S. Department of Agriculture lowered its forecast for global grain supplies.

“Corn really tipped the scales here, wanting to sell off, and then wheat sold off with it too,” said Lane Broadbent, a vice president of KIS Futures Inc. in Oklahoma City.

Wheat futures for December delivery fell 7.25 cents, or 1 percent, to close at $7.0275 a bushel at 1:15 p.m. on the Chicago Board of Trade. Earlier, the price rose as much as 1.7 percent.

The commodity has jumped 46 percent since the end of June. Russia banned grain exports in August following the most-severe drought in five decades.

On Oct. 8, the USDA slashed its estimate for corn production by 3.8 percent from a month earlier. The agency cut its estimate for global wheat supplies by 1.8 percent.

Wheat also dropped today on signs that beneficial weather will boost crops.

“Spotty, locally heavy” rains fell on winter-wheat areas yesterday from Kansas to Kentucky, and sections of the Midwest were receiving more rain today, Allen Motew, a meteorologist at QT 

Weather in Chicago, said in a report.

“We’re into planting season now, and there’s dry weather concern around, but we’ve got another 60 days before we really get into big trouble,” Broadbent said. “If you get planted before Christmas, you can still raise a crop.”

Dollar’s Slide

The dollar’s slump has boosted the appeal of grain sales from the U.S., the world’s biggest exporter.

Today, the greenback approached a nine-month low against a against a basket of six currencies. U.S. exporters sold 100,000 metric tons to Iraq for delivery in the year that began June 1, the USDA said.

“We’ve got a dollar that’s been weakening, and that’s going to help make U.S. wheat prices more attractive,” said Dan Kuechenmeister, the manager of the commodities department at RBC Dain Rauscher in Minneapolis. Exports have been cut way back from Eastern Europe and the former Soviet Union, so the number of shops somebody can go to buy wheat seems to be dwindling.”

Wheat is the fourth-biggest U.S. crop, valued at $10.6 billion in 2009, behind corn, soybeans and hay, government data show.

To contact the reporter on this story: Whitney McFerron in Chicago at wmcferron1@bloomberg.net.

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

Wheat Technicals from Reuters

SINGAPORE, Oct. 13 (Reuters) - The CBOT wheat December contract <WZ0> could rise to Monday's high of $7.39-¾   per bushel as it has resumed its rally during the previous trading session.

The wave "4" correction is believed to have been completed as a small double-bottom was formed around $7.03, and this is a typical reversal pattern for wheat.

The rally could be so explosive that it may surpass $7.39-¾    with ease, to even penetrate into a range of $7.70-$7.80. 

Support is at $7.03, a fall below which would extend the loss to $6.88-1/2, the 61.8 percent Fibonacci retracement level on the rise from $6.57 to $7.39-3/4.

Wheat Technicals from Reuters

 

   

SINGAPORE, Oct. 12 (Reuters) - CBOT wheat's December contract would resume the rally on Tuesday, and return to the Monday high at $7.39-¾   per bushel, as strong support is observed around $7.03.

A Fibonacci retracement analysis on the wave "3" rise from $6.57 to $7.39-¾   reveals a support zone between $6.98-½   and $7.08 - the 38.2 percent and 50 percent levels.

What enforces the zone is a descending trendline support at $7.00, and together, they make it hard for a further slide.

Support is at $7.03, a fall below which would extend to $6.88-½   - the 61.8 percent Fibonacci retracement level.

Wheat Technicals from Reuters

SINGAPORE, Oct.11 (Reuters) - The CBOT wheat December contract will extend its gain to $7.57 per bushel, the wave (b) peak, as a bullish trend has been established.

The uptrend is developing towards an eventual target at $8.68, as the correction from that level adopted an "a-b-c" wave mode, which indicates the following rally would be able to push the price high above the preceding wave "3" top.

But before the aggressive $8.68 level is targeted, a realistic target would be at $7.57, and correction would be limited to a descending trendline support at $7.00.

Wheat and corn rise as Ukraine limits exports

By Javier Blas in London and Mark Rachkevych in Kiev

Published: October 7 2010 19:24 | Last updated: October 7 2010 19:24

Wheat and corn prices rose after Ukraine said it would impose export restrictions on agricultural commodities until the end of the year after a drought this summer devastated the country’s cereal crop.

Kiev said it would cap overseas sales of wheat and barley at 500,000 tonnes each and corn at 2m tonnes.

The cap announcement by first deputy prime minister Andriy Klyuev needs to be confirmed at a cabinet meeting next week.

“We introduced them [the quotas] on Monday,” he told reporters in Kiev.

Analysts said Ukraine had exported 4.2m-4.5m tonnes of winter grains, mostly wheat and barley, so the limits would leave little room for further sales.

Traders said the move to impose official export limits followed weeks of de facto limits in overseas sales using customs and administrative measures.

Andriy Yarmak, a Kiev-based agribusiness consultant, said the move would “adversely affect Ukraine’s global position on the grain market”, being another of Kiev’s frequent interventions in the market to ban or limit grain exports.

Dmytro Ushenko, agriculture analyst at BG Capital in Kiev, said the move came after “an acceleration in the pace of grain exports and the need to replenish state food grain reserves”.

He added that the export limits were also aimed “at bringing prices in check before the upcoming municipal elections to be held at the end of October”.

In Paris, Liffe December milling wheat rose 1.4 per cent to €206.75 a tonne.

Wheat prices are still below the two-year high hit last month at €238 a tonne after Russia announced an extension of its export ban in grains until mid-2011.

In Chicago, CBOT December corn prices rose 2.5 per cent to $5 a bushel.

Corn hit a two-year high of $5.28½ bushels in late September on concerns about a lower than expected crop in the US, the largest exporter of the cereal.

Barley prices in Europe also rose, with the cost of the grain in the physical market in northern France quoted at €185 a tonne.

Prices are below the highs reached this summer, when barley in Europe traded at an unusual premium to milling wheat.

Elsewhere in commodities markets, crude oil prices fell sharply amid profit-taking after three days of large gains and as the US dollar strengthened against the euro and other currencies.

In late afternoon trading, Nymex November West Texas Intermediate dropped $1.56 a barrel to $81.67 a barrel while ICE November Brent fell $1.86 to $83.23.

Crude oil prices remain within the $70-$85 a barrel range in place for most of the last year.

Traders will watch next week’s Opec meeting in Vienna for signals about the direction of the market.

The oil cartel is expected to maintain its production unchanged.

US natural gas prices fell nearly 5 per cent to $3.686 per million British thermal units on ample supplies.

Base metals prices fell, but prices remained high ahead of London Metal Exchange Week, the annual gathering of the industry in London.

Sugar futures headed for the biggest gain since May on concerns supplies in India, the world’s second-biggest producer, would be disrupted. Raw sugar for March delivery rose 1.38 cents to 24.92 cents a pound.

Copyright The Financial Times Limited 2010. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.

Wheat Technicals from Reuters

SINGAPORE, Oct.7 (Reuters) - CBOT wheat's December contract <WZ0> should rise to $6.84 per bushel as a wave "c" or wave "3" is progressing.

The upward wave is expected to travel the same length with wave "1" or wave "a", to arrive at $6.84 - the 100 percent Fibonacci projection level - or it could travel to the 161.8 percent level at $7.02.

An inverted head-and-shoulders pattern could be forming, confirmation of which will be when wheat rises above $6.75, and a bullish target at $7.07 would then be established.

A fall below minor support at $6.55 would extend to $6.45. 

Wheat Technicals from Reuters

SINGAPORE, Oct 6 (Reuters) - CBOT December wheat would rebound to trade between $6.86-¾   and $7.00-¼   per bushel as a five-wave cycle ended around Monday's low of $6.43-1/2.

A Fibonacci retracement analysis on the fall from $7.57 to $6.43-½   reveals that the rebound may extend gains to a range formed by the 38.2 percent and 50 percent levels.


Its retracement will be limited to the wave "3" trough at $6.50-3/4, but a fall below $6.43-½   will be very bearish, setting a target of $6.27-3/8.
 

Wheat Technicals from Reuters

SINGAPORE, Oct 5 (Reuters) - A bearish target of $6.27-½    per bushel for the CBOT wheat December contract <WZ0> has been temporarily aborted, as a rebound is likely to push the price towards $6.80.

A relabeling on the wave pattern shows that a five-wave cycle could have ended around $6.43-1/2, a low touched on Monday.

A bullish divergence that has formed on the RSI indicator is another signal suggesting a possible sharp rebound besides the wave pattern.

The rebound towards $6.80 will be confirmed when wheat rises above $6.54, but before that the downtrend towards $6.27-½   may continue. 

Russia Wheat Production May Drop 33%, USDA Unit Says

(Bloomberg) -- Russia’s wheat production may plunge by 33 percent this year after the most-severe drought in 50 years harmed crops, a U.S. Department of Agriculture unit said.

Output will fall to 41.5 million metric tons in the year that began July 1 from 61.7 million tons last year, the USDA’s Foreign Agricultural Service said in a report posted today on its website. The attache’s estimate was below the official U.S. projection announced last month. Russian exports will plunge 78 percent to 4.1 million tons, the service said.

“Significant grain area was destroyed by drought, and harvested area might be one of the lowest in the last 10 years,” the U.S. service said. Russia, once the world’s third- largest grower, barred exports of grains in August.

On Sept. 10, the USDA projected that Russia would produce 42.5 million tons of wheat and export 3.5 million tons.

Russian barley output may drop 54 percent to 8.2 million tons from a year earlier, and exports may plummet 91 percent to 250,000 tons, the U.S. attache said. Corn production may drop 11 percent to 3.5 million tons.

Today, wheat prices fell in Chicago, capping the longest slump in four months, as rains in Russia and Eastern Europe improved the prospects for winter crops.

Wheat futures for December delivery fell 7.75 cents, or 1.2 percent, to settle at $6.4725 a bushel on the Chicago Board of Trade. The grain dropped for the sixth straight session, the longest slide since early June. The price has climbed 20 percent this year.

--Editors: Patrick McKiernan, Daniel Enoch

To contact the reporter on this story: Whitney McFerron in Chicago at wmcferron1@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

Wheat Technicals from Reuters

SINGAPORE, Oct.1 (Reuters) - CBOT wheat's December contract is seen slipping to $6.27-½   per bushel, as a wave "c" may develop further. 

A Fibonacci projection on the length of wave "c" points to $6.67 and $6.27-½   respectively, being the 100 percent and 161.8 percent levels, based on the length of wave "a". 

The 100 percent Fibonacci level has been broken below, and quite likely, the next level at $6.27-½   will be touched soon. 

Any rebound will be limited to resistance at $6.87, a rise above which could extend to the contracting range of the triangle between $7.00 and $7.10.

Wheat Advances on Concern Rainfall May Damage Canadian Harvest; Corn Drops

Wheat futures advanced, paring the weekly decline, on concerns excessive rains in Canada may damage crops in the world’s third-largest exporter. 

December-delivery wheat increased as much as 0.8 percent to $7.03 a bushel in Chicago Board of Trade before trading at $6.99 at 10:53 a.m. Singapore time, taking the weekly loss to 5.4 percent, the most for the most-active contract since May 14.

Harvests of crops including wheat, barley and canola in Saskatchewan, Canada’s biggest wheat-growing province, were 18 percent complete as of Sept. 20, behind the five-year average of 65 percent, because of “significant rainfall in most areas,” the government said in a report yesterday. Frost affected the growing areas on Sept. 17 and 18, it said.

“Rain potentially reduces the overall quality” of the grain, Michael Pitts, commodity sales director at National Australia Bank Ltd., said by phone from Sydney. “We may have disease problems as well.”

Corn for December delivery declined 0.5 percent to $4.97 a bushel in Chicago, and headed for a 3.1 percent loss this week.

Farmers in Argentina, the world’s second-largest corn exporter, will plant more than previously forecast this year as rains may increase yields for the next harvest, the Buenos Aires Cereals Exchange said yesterday.

The crop will cover 3 million hectares, more than the 2.93 million hectares predicted a week ago, the exchange said in its weekly report. About 13 percent of the area is planted, it said.

World corn stockpiles will tumble to a four-year low of 131 million tons at the end of 2010-2011, 4 million tons below last month’s forecast, on reduced estimates for output in the U.S. and Ukraine, the International Grains Council said yesterday.

The global crop will be a record 824 million tons, smaller than the 829 million tons predicted last month, the council said.

“Comparatively higher prices of feed-grade wheat and barley are expected to shift some demand to imported maize, especially in South Korea, the Philippines and Israel,” the council said, raising its estimate on corn use in livestock feeds by 6 million tons to 485 million tons.

November-delivery soybeans were little changed at $10.93 a bushel, taking the weekly gain to 2.3 percent.

To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net

[Bloomberg] 

Wheat Futures Advance as Cold Weather Threatens Crops in Canada, China

Wheat rose for the first time in four days as cold weather threatened crops in China and Canada, the world’s second-biggest exporter.

An overnight freeze damaged wheat, canola and barley in Alberta and Saskatchewan, said Drew Lerner, the president of World Weather Inc. in Overland Park, Kansas. In China, the cold may hurt corn in the biggest growing-region, according to the National Grain & Oils Information Center website. That may boost demand for wheat to use in livestock feed.

“Canada’s harvest problems are helping prices,” said Darrell Holaday, the president of Advanced Market Concepts in Manhattan, Kansas. “The Chinese freeze threat is another thing. We’re going from one weather scare to another.”

Wheat futures for December delivery rose 20 cents, or 2.8 percent, to close at $7.3925 a bushel at 1:15 p.m. on the Chicago Board of Trade, ending the week up 0.3 percent.

The price has gained 7.8 percent this month on speculation that reduced production in Russia and Ukraine will boost demand from other exporting countries.

The U.S. is the biggest wheat exporter, followed by Canada, Russia and Australia, according to the Department of Agriculture. The grain is the fourth-biggest U.S. crop, valued at $10.6 billion in 2009, behind corn, soybeans and hay, government data show.

Corn gained 3.5 percent today and is up 17 percent this month on speculation that adverse weather will curb production as demand rises.

“So much of the wheat in the world is used for feed,” Holaday said. “It’s tied at the hip to corn.”

To contact the reporter on this story: Tony C. Dreibus in Chicago at tdreibus@bloomberg.net.