GRAINS-Wheat starts 2016 on positive note, ample supplies cap gains

In Commodity News 05/01/2016

Chicago wheat kicked off the new year with modest gains as prices were underpinned by short-covering and concerns about the U.S. weather after the grain market suffered deep losses in 2015. Corn and soybeans was largely unchanged in early Asian trade.

FUNDAMENTALS

* Chicago Board of Trade March wheat gained 0.2 percent to $4.70-3/4 a bushel by 0120 GMT on growing concerns over the U.S. weather. Wheat lost around a fifth of its value last year.

* Heavy storms have caused flooding in parts of the southern U.S. Midwest, threatening the region’s soft red winter wheat.

* A swath of eastern Texas, Arkansas, Missouri and southern Illinois received 3 to 7 inches (7.5 to 18 cm) of rain with localized totals of up to 10 inches (25 cm), MDA Weather Services said in a note to clients last week.

* U.S. grain farmers are scrambling to find shelter for their crops and handlers are hunting for alternative transportation routes, as floods shut waterways from Illinois to Missouri.

* Still, ample global supplies of wheat, corn and soybeans are likely to limit gains in the agricultural markets.

* Brazil’s Mato Grosso region has received much-needed rains over the past 10 days, relieving soybean producing area in the need of moisture.

* Weekly export sales data for soybeans was bearish for prices on Thursday. The U.S. Department of Agriculture reported sales of U.S. soybeans in the week to Dec. 24 at 478,800 tonnes, below a range of trade estimates and a marketing year low.

* Corn and soybeans each declined for a third straight year in 2015, with corn down 9.6 percent and soybeans down 14.5 percent.

* In other news that is likely to be supportive for corn prices, India will soon ask state-run traders to import half a million tonnes of duty-free corn after a second straight drought cut output, in what would be the country’s first overseas purchase in 16 years.

MARKET NEWS

* Asian shares began their first trading of 2016 on a cautious note on Monday. U.S. stock futures were up 0.3 percent.

  Grains prices at  0120 GMT
  Contract        Last    Change  Pct chg  Two-day chg MA 30   RSI 
  CBOT wheat     470.75     0.75  +0.16%    +0.21%     481.17   40
  CBOT corn      358.75     0.00  +0.00%    -0.07%     370.83   33
  CBOT soy       864.25     0.00  +0.00%    -0.69%     874.03   45
  CBOT rice      $11.79   -$0.04  -0.38%    -0.21%     $11.61   67
  WTI crude      $37.82    $0.78  +2.11%    +3.33%     $38.37   57
  Currencies                                                
  Euro/dlr       $1.083  -$0.003  -0.28%    -0.29%
  USD/AUD         0.723   -0.007  -0.97%    -0.69%

Most active contracts
Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight
RSI 14, exponential

Source: Reuters (Reporting by Naveen Thukral; Editing by Richard Pullin)