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GRAINS-Wheat up on dollar, weather woes; corn turns lower

Published 04/20/2011, 01:44 PM
Updated 04/20/2011, 01:48 PM
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* Wheat, soy rally on sinking dollar, higher crude

* Wheat up on dry weather, delays to spring planting

* Soy rises, corn falls on drier Midwest seeding forecast

* Coming up: Weekly USDA export sales report on Thursday (Recasts, adds quotes, details, updates prices)

By Karl Plume

CHICAGO, April 20 (Reuters) - U.S. wheat futures surged 1.5 percent on Wednesday in a broad-based commodities rally fueled by a sinking dollar, higher stock markets and adverse weather which threatened wheat production across the globe.

Gold jumped to record highs above $1,500 an ounce while oil jumped 3 percent, helping to send grain markets higher from the opening bell.

But as soybeans clung to early gains, up 1.6 percent, corn turned lower as a drier U.S. Midwest weather forecast eased concerns about corn planting delays which could have shifted more U.S. acreage to soybean cultivation.

"The midday weather forecasts are starting to show a little change in pattern from May 1 forward. The European model is basically saying we're turning more toward warmer and drier," said Charlie Sernatinger, analyst with ABN AMRO.

"There's liquidation of corn/wheat and corn/beans (spreads) going on today," he said.

Corn gained on soy this week on worries that wet weather and cooler-than-normal temperatures would delay planting in the U.S. Midwest, potentially threatening yields in the world's top exporter at a time when supplies are exceptionally tight.

"It is definitely very wet there now and should remain wet there through the first week in May. However, our current forecast does begin to trend that area drier by mid May," Donald Kenney, senior agricultural meteorologist for Cropcast Inc, told the Reuters global ag forum on Wednesday.

Chicago Board of Trade corn for May delivery fell 0.7 percent to $7.44 a bushel by 12:24 p.m. CDT (1724 GMT), while May soybeans climbed 1.2 percent to $13.58 a bushel in its strongest advance in nearly two weeks.

WHEAT WEATHER WOES

But as weather fears eased in corn, wheat rallied for a fourth consecutive day as dry weather scorched developing winter wheat crops in the United States and Europe and soggy conditions delayed seeding of spring-planted wheat in the United States and Canada.

"We're into a weather market and it's expected to hurt winter wheat," said Virginia McGathey, a wheat options trader and president of McGathey Commodities.

"There had been a big position short May wheat and long May corn and they're unwinding that now. They're unwinding corn/wheat spreads and that is adding support to wheat," McGathey said.

CBOT May wheat rose 0.8 percent to $7.92-1/4 a bushel, extending a four-day rally that was the largest in two weeks. (Additional reporting by Martin Roberts in Madrid, Naveen Thukral in Singapore, Sam Nelson in Chicago; Editing by Dale Hudson and Jim Marshall)

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