Corn hits one-week high on export prospects, technicals

 Corn prices rose to a one-week high on Wednesday on a mix of technical buying and prospects for improved U.S. export demand as old-crop supplies from South America dwindle, analysts said.

Wheat advanced, halting a four-day sell-off, and soybeans rose for a second day, joining a broad rally in commodities tied in part to end-of-the-month buying.

At the CBOT as of 12:30 p.m. CDT (1730 GMT), CBOT December corn was up 13-1/4 cents, or 1.8 percent, at $7.55 per bushel. December wheat was up 12 cents, or 1.4 percent, at $8.68-3/4 per bushel, while benchmark January soybeans were up 14-3/4 cents at $15.51-1/4 a bushel.

Corn rose on signs that cash offerings of corn from Argentina and Brazil were diminishing, potentially shifting export business back to the United States.

"South American grain prices have been rising over the last two weeks," said Ken Smithmier, an analyst with the Hightower Report in Chicago. "There is a glimmer of hope here for the bulls that maybe South Korean and Japanese demand that has been shifted to South America, might come back here pretty soon."

Analysts also noted concerns about corn planting delays in South America that could prompt some producers to switch some acres to soybeans. A local analyst in Argentina on Tuesday said the country could lose up to 20 percent of its corn production for 2012/13 due to excessive rains and flooding.

Chart-based buying added support. CBOT December corn hit a one-week high at $7.57-3/4 a bushel, gaining momentum by staying above its 100-day moving average. The contract dipped below the 100-day average on Monday for the first time since June, but has settled above it each day this week.

Egypt buys wheat

Wheat rose on news that Egypt, the world’s biggest wheat importer, purchased a total of 300,000 tonnes of wheat from Romania, Russia and France.

"We had a reminder the world is still hungry, with Egypt buying 300,000 tonnes of wheat," said Rich Feltes, vice-president of research for R.J. O’Brien, although he noted that none of the wheat was of U.S. origin . Analysts noted ongoing concerns about tightening global supplies of wheat, given excessive rains in Argentina and poor yields in Australia. Argentina’s Rosario grains exchange on Tuesday projected the country’s wheat production at 10 million tonnes, below the U.S. Department of Agriculture’s latest forecast for Argentina at 11.5 million.

Like corn, CBOT December wheat attracted technical buying by staying above its 100-day moving average near $8.58. The contract traded below that average on Tuesday for the first time since June, but settled just above it.

Additional support stemmed from concerns that rain and snow in Ohio this week could limit plantings of soft red winter wheat, the type traded in Chicago.

"We need some drier weather in the soft red areas, the Ohio River Valley, where we saw some snow as a result of the hurricane. That could deter some farmers from going ahead with wheat plantings," said Shawn McCambridge, grains analyst with Jefferies Bache.

Soybeans

Soybean futures rose for a second day on technical buying, talk of demand from top soy buyer China and concerns about planting delays in South America.

"There is some market chatter that we’re going to see some better Chinese demand, and that is working to keep soybeans prices a little bit firmer," said Sterling Smith, futures strategist with Citigroup.

Hamburg-based oilseeds analyst Oil World on Tuesday had cautioned that rain delays could reduce soy plantings in Brazil and Argentina.

Later soy plantings could translate to a later harvest, creating a longer time period in early 2013 when the United States dominates as the world’s soybean supplier, as buyers wait for the first Brazilian soybeans to reach marketing channels.

"The Brazilians had every intention to get in there early to capture some early delivery premiums. That has been pushed back," said Jim Gerlach, president of A/C Trading.

Gerlach also said traders appeared to be covering short positions in soybeans following a 2.2 percent decline on Monday that put the market on pace for a slight decline for the week.

Julie Ingwersen reports for Reuters in Chicago