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GRAINS-Wheat jumps 2 pct on U.S. weather, Ukraine concerns
March 14, 2014 / 7:37 PM / 4 years ago

GRAINS-Wheat jumps 2 pct on U.S. weather, Ukraine concerns

* Wheat posts 6.8 pct weekly gain; market awaits vote in
Crimea
    * Soybeans fall on China demand woes

 (Adds new analyst quote, closing prices)
    By Mark Weinraub
    CHICAGO, March 14 (Reuters) - U.S. wheat futures rose 2
percent on Friday, extending a rally on worries about dry
weather limiting crop production in the U.S. Plains and ongoing
fears that supplies from Ukraine will be disrupted due to
political turmoil, traders said.
    The strength in wheat lent support to corn prices, but
soybeans closed slower due to sagging demand from China.
    "You still have some people starting to get a little more
concerned about the U.S. hard red winter wheat crop as it comes
out of dormancy," said Mike Krueger, president of The Money
Farm, a grain market advisory service. "There is not much rain
in the forecast and it has been dry."
    Wheat prices also remained technically strong after pushing
through key resistance points during the past few weeks.
    Chicago Board of Trade soft red winter wheat for May
delivery settled up 13-1/2 cents at $6.87-1/4 a bushel.
    The front-month CBOT wheat contract gained 6.8 percent
this week. During the past two weeks, wheat futures have risen
15.2 percent, their biggest two-week rally since July 2012.
    "It's a combination of Ukraine/Russia, and a reduced
precipitation forecast for the southern Plains, with no
additional rains, beyond this weekend, for a few weeks. So -
ongoing problems there," said Dan Cekander, grains analyst with
Newedge USA.
    The political crisis in Ukraine threatens to curb supplies
from one of the world's leading exporters of wheat and corn.
    Port activity has continued normally and farmers have
started spring sowing, but talk that traders are holding back
from fresh export deals and that farmers are struggling to
finance crop sowing has made grain markets nervous.
    Investors are awaiting the outcome of a referendum on Sunday
in Crimea, in which the southern Ukrainian region could vote to
join Russia and prompt Western sanctions against Russia.
 
    CBOT May soybeans were down 7-3/4 cents at $13.88-1/2
a bushel. Front-month soybeans shed 5.6 percent this week,
the biggest weekly loss on a continuous basis in nearly six
months.
    "We have probably seen the peak in soybean prices," said
Paul Deane, agricultural commodity strategist at ANZ in
Melbourne. "I don't see how prices can sustain at these levels."
    The ongoing harvest of a large soybean crop in Brazil is
pushing supplies higher even as demand from China, the top buyer
of soybeans, is weakening. The combination has hurt both the
cash as well as the futures market in the United States and
South America.
    "The fear of further Chinese cancellations will likely
temper any upside ideas for their basis and/or our futures,"
Sterling Smith, Citigroup market strategist, said in a note to
clients. "Feed demand across all sectors of the country (China)
is weak, as bird flu is seen cutting into demand for poultry."  
 
    CBOT May corn was 1 cent higher at $4.86 a bushel. The
front-month contract posted a 1.8 percent drop for the
week.
    China is likely to stockpile 60 million tonnes of corn by
the end of April, the China National Grain and Oils Information
Centre (CNGOIC) said in a report on Friday.
    The levels were higher than earlier expected as outbreaks of
bird flu hurt domestic demand for feed grain, prompting farmers
to sell more to the government. 
    
    The following figures are quoted in U.S. cents, benchmark
contracts, except EU wheat (euros) and soymeal (dollars). CBOT
wheat, corn and soybeans per bushel, rice per hundredweight,
soymeal per ton and soyoil per lb:
    
 Prices at 1419 CDT (1919 GMT):
                             LAST       NET    PCT    YTD PCT
                                      CHANGE  CHANGE   CHANGE
 CBOT corn                  486.00     0.50   0.1       15.2
 CBOT soy                  1,388.50   -7.75  -0.6        5.8
 CBOT meal                  444.00     2.10   0.5        1.4
 CBOT soyoil                 42.29    -0.70  -1.6        8.9
 CBOT wheat                 687.25    13.50   2.0       13.5
 CBOT rice                 1,535.50   13.00   0.9       -1.0
 EU wheat                   211.50     0.00   0.0        1.2
 
 US crude                    99.00     0.80   0.8        0.6
 Dow Jones                  16,067      -42  -0.3       -3.1
 Gold                      1,382.71   12.72   0.9       14.7
 Euro/dollar                1.3908    0.004   0.3        1.9
 Dollar Index              79.4320   -0.1880 -0.2       -0.8
 Baltic Freight               1477        9   0.6      -35.1
 
 (Additional reporting by Julie Ingwersen; editing by Paul Simao
and G Crosse)

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