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Grains surge ahead of Friday USDA data

03/07/2013 @ 4:06pm

Grain and soybean futures finished higher Thursday, stabilizing ahead of Friday's release of U.S. government crop reports.

Traders readied for forecasts from the U.S. Department of Agriculture that are expected to highlight that domestic supplies of corn and soybeans are historically tight. The USDA will release its latest outlook on world supply and demand Friday at noon EST.

Thursday's trading session was mixed, with pre-report positioning and a weekly export sales report from USDA driving price direction, market watchers said. Traders have been paring positions ahead of the crop reports.

Corn futures showed stability after prices slid 3.3% Wednesday.

Chicago Board of Trade May corn ended up 2 3/4 cents, or 0.4%, at $6.91 1/4 a bushel.

"No one wanted to keep pressing the market ahead of a crop report," said John Kleist, senior analyst with brokerage Ebottrading.com. "The corn market deserved a warranted correction after Wednesday's big slide."




However, the USDA is expected to show a buildup in U.S. corn stocks, and with ongoing sluggish export demand, buyers are not aggressively emerging to elevate prices.

Traders have accepted that end-of-year U.S. corn stockpiles will be tight, but not as slim as the market had previously anticipated.

The corn market has some problems, but Thursday's poor weekly export sales underscored that export demand remains weak, Mr. Kleist said.

The USDA reported net export sales of 156,600 metric tons of corn in the week through Feb. 28, including net reductions of 49,800 tons for delivery in the current marketing year that ends Aug. 31. The tally fell far short of analysts' forecasts for net sales of 500,000 to 700,000 tons.

Foreign buyers have less incentive to buy U.S. corn supplies due to expectations for ample global supplies of wheat for animal feed, as well as the approaching corn harvest in South America, Ebottrading.com's Mr. Kleist said.

Soybean futures ended higher, fueled by the threat of tighter U.S. supplies. Federal forecasters are expected to lower their projection for domestic stockpiles at the end of the current crop season, compared with their estimate last month, due to stout export and domestic demand.

Wheat futures climbed as well, driven by traders shedding some risk ahead of Friday's reports after recent declines.

CBOT soybeans for May delivery finished up 7 1/2 cents, or 0.5%, at $14.73 1/2 a bushel.

May wheat futures ended up 11 3/4 cents, or 1.7%, at $6.95 1/2 a bushel at the Chicago Board of Trade. Kansas City Board of Trade May wheat rose 10 cents, or 1.4%, to $7.34 1/2 a bushel. MGEX May wheat finished up 12 cents, or 1.5%, at $7.95 1/2 a bushel.


-Write to Andrew Johnson Jr. at andrew.johnsonjr@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
March 07, 2013 16:03 ET (21:03 GMT)
DJ UPDATE: Grain, Soy Futures Rise Ahead of Key USDA Crop Reports->copyright


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