RTRS:GRAINS-Wheat, soy ease on dollar; USDA report eyed
* Wheat, corn give up some gains on strong dollar
* Soy slips, takes breather after rising for 5 days
* Uncertainty over Greek debt talks weighs on market
(Adds analyst comment, Paris wheat futures, updates prices)
By Naveen Thukral and Ivana Sekularac
SINGAPORE/AMSTERDAM, Feb 7 (Reuters) - U.S. soybeans slid from a
three-month top on Tuesday, snapping five sessions of gains, while wheat fell
around half a percent, pressured by a stronger dollar and uncertainty about
Greek bailout deal.
Corn fell 0.4 percent as investors squared positions ahead of Thursday's
U.S. Department of Agriculture report on global supply and demand of
agricultural products.
"At this stage of the game, price levels where they are now would need
further downgrades to the production outlook, worst weather going forward and we
are not seeing enough strength of the underlying fundamentals," said Rabobank
analyst Erin Ftizpatrick.
"Broader markets are not helping, we've got a strong dollar and equities are
off today."
Chicago Board of Trade March soy fell 0.12 percent to $12.31-1/2 a
bushel by 1125 GMT, after touching $12.44 in the previous session, its highest
since late October on a continuation chart.
March wheat lost 0.8 percent to $6.63 a bushel, after gaining almost
10 percent over the last three weeks. Corn for March delivery fell 0.47
percent to $6.41-1/4 a bushel.
"Everybody is anticipating what the USDA is going to do. The market has
definitely been pricing in probably low the mid end range of private estimates,"
Fitzpatrick said.
European stocks, which have risen sharply on a flood of cash available to
investors at the start of the new year, fell back as weak updates from the likes
of Swiss bank UBS signalled the crisis will wreak further damage on
the banking sector.
Greece's prime minister and the leaders of the main political parties are
set to resume talks today on new austerity measures demanded by the EU in return
for a second bailout.
Concerns about cold weather in the key wheat-growing areas of the Black Sea
region and Europe are providing support to the wheat market.
In addition to the harsh weather, expectations that Russia will curb grain
exports drove wheat futures to a 4-1/2 month high last week. But Russia has said
it saw no need for grain export restrictions in April and raised its grain
export forecast for 2011/12 by 12.5 percent.
In Paris, benchmark March milling wheat contracts eased 1.24 percent to
219.50 euros after gaining more than six percent in the past five days.
"However, the obvious frost damage should be moderate in the EU, though
fears of whether this will remain the case will continue to keep the market on
tenterhooks," Germany's Commerzbank said in a statement.
"Given the continuing frosty conditions, even more investors may see
themselves forced to close their short positions."
Regulatory data showed late on Friday that large speculators cut their net
short position in CBOT wheat from a record level by covering shorts and buying
some long contracts.
SOYBEAN CONCERNS
For soybeans, dryness in soy-growing parts of South America is threatening
to curb yields, giving opportunity to U.S. suppliers to boost exports to China,
the world's top buyer.
"I think you are going to see a little bit of position squaring before the
USDA report," said Brett Cooper, senior manager of markets at FCStone Australia.
"There has been rain in parts of South America but people are certainly
concerned about the yields ... Is it too late to add yields to the Brazilian
crop? That's the big question," he said.
The dollar index, which measures the strength of the greenback
against a basket of currencies, rose 0.07 percent, making dollar-priced U.S.
commodities expensive for overseas buyers.
Analysts in a Reuters poll expected upcoming U.S. Agriculture Department
report to show domestic ending stocks of wheat for the 2011/12 crop year at 867
million bushels, down slightly from the government's January estimate of 870
million bushels.
World ending stocks of wheat were forecast to come in at 208.963 million
tonnes, compared to 210.020 million in the January report.
In the soybean and corn market, traders are expecting the U.S. Department of
Agriculture to show lower estimate for South American production.
Argentina's 2011/12 soy harvest will be at least 47 million tonnes, a
government source said on Monday, while a Reuters poll showed analysts expecting
production of 45 million to 50 million tonnes.
Brazil's projected 2011/12 soybean crop - the world's second biggest - is
also shrinking, and grain analyst Celeres trimmed its estimate on Monday to
72.04 million tonnes from 74.4 million tonnes in early January.
Rains have been forecast this week in key growing regions of Argentina but
dry weather over the past month was likely to reduce yields in the No. 3 world
soy exporter.
As a result, China is likely to buy more U.S. soybeans this quarter with a
withering drought expected to cut the South American harvest..
* Prices as of 1145 GMT
Product Last Change Pct Move End 2011 Ytd Pct
Paris wheat 212.00 -2.25 -1.05 195.25 8.58
London wheat 169.00 0.50 +0.30 153.65 9.99
Paris maize 209.75 -0.75 -0.36 197.25 6.34
Paris rape 433.25 0.00 +0.00 421.50 2.79
CBOT wheat 673.00 -6.75 -0.99 671.25 0.26
CBOT corn 647.25 -4.00 -0.61 654.75 -1.15
CBOT soybeans 1240.25 -1.75 -0.14 1207.75 2.69
Crude oil 96.22 -0.69 -0.71 98.83 -2.64
Euro/dlr 1.31 0.04 +3.25 1.30 1.24
* All grain and oilseed prices for second position. Paris futures prices in
Euros per tonne, London wheat in pounds per tonne and CBOT in cents per bushel.
