USA: Wheat futures rise ahead of USDA report

U.S. wheat futures rose on August 11th, breaking a three-session losing streak, ahead of a key U.S. Department of Agriculture (USDA) report expected to estimate lower global output after Black Sea crop damage, according to Reuters.

"People have taken positions ahead of the USDA report but some early day gains were given up because of profit-taking," one trader said.

U.S. wheat rose 2 percent on Wednesday in the Asian session, but gave up some of the early gains as trading remained nervous, with traders citing some adjustments ahead of Thursday's world crop report from the U.S. Department of Agriculture.

"The funds are booking some profits before the USDA report," one French dealer said.

On Wednesday, CBOT wheat for September delivery was up 0.2 percent to $696-1/4 per bushel by 1117 GMT (7:17 a.m. EDT) after sliding 2.5 percent in the previous session.

Chicago Board of Trade wheat futures are up 66 percent from the June low of $4.25- a bushel despite losses since the market fell from a two-year peak on Friday.

Paris wheat futures were lower on Wednesday as the French market continued to track U.S. prices as the two origins vie for knock-on demand created by Russia's export ban.

The French market was awaiting results of tenders issued by Egypt and Algeria to see whether French wheat would secure more business after a 240,000-tonne sale to Egypt last weekend.

Paris benchmark November milling wheat on Euronext fell 0.5 euros to 206.50 euros a tonne by 1117 GMT, with the market testing support at 205 euros ahead of a major threshold at 200 euros.

Reaction to news from Ukraine, where the government is due to decide on Wednesday whether to introduce export quotas, was muted with dwindling exports from both Ukraine and Kakazhstan already anticipated.

"It's gone from being informal news to official news," the dealer said of potential export curbs in Ukraine.

NERVOUS MARKETS

The drought in eastern Europe -- which has boosted U.S. wheat futures since the end of June -- shows no sign of respite, with a senior Russian weather official predicting on Tuesday that the heat in most parts of European Russia is likely to continue over the next 10 days.

"The global grain markets remain very nervous and any further hot and dry conditions in Russia continue to unsettle the market," said Garry Booth, a trader with MF Global Australia. "Export numbers coming out of the U.S. have been a good surprise."

Private exporters reported the sale of 120,000 tonnes of U.S. wheat, mainly to China and Egypt, the U.S. Department of Agriculture said on Tuesday.

China's National Bureau of Statistics warned lower global wheat output could translate into inflationary pressure for the world's top producer and consumer of the grain.

Analysts were expecting the USDA's forecasts for U.S. wheat, corn and soybean production to rise when it releases its monthly estimate at 1230 GMT on Thursday.

But U.S. ending stocks were seen falling as global crop woes will force end users to look to the United States to satisfy their supply needs.

U.S. corn and soybean prices were little changed.

CBOT September corn was down 0.1 percent at $3.93 a bushel and August soybeans were up a marginal 0.2 percent to $10.39-1/4 a bushel.

Soybeans and corn futures, which have been tracking gains in the wheat market, remain under pressure from expectations of large crops in the United States.

11 August, 2010