Corn, wheat extend rebound; exports in focus

PARIS/SINGAPORE, March 18 (Reuters) U.S. and European grain futures surged for a second straight session on Friday to week-long highs as fears about a crisis in Japan eased and robust grain exports turned attention back to fundamentals. The immediate outlook remained fragile, however, because of an unfolding nuclear crisis in Japan following last week's earthquake and possible military intervention in Libya. Global stocks rose and the yen tumbled after the Group of Seven leading economies intervened to weaken the Japanese currency, which has surged since Japan's earthquake. Grain markets were also reassured by the fact Japan's farm ministry bought 28,135 tonnes of feed wheat and 163,435 tonnes of feed barley in a tender, which analysts said was a step towards normalisation of trade. U.S. corn surged 5 percent after a similar rise in the previous session, when it traded limit-up on hefty weekly export sales plus renewed talk of purchases by China. U.S. wheat added more than 4 percent, on top of a 7 percent jump on Thursday, on bigger-than-expected weekly exports and with some attention turning back to crop concerns. In Europe, milling wheat futures rose as much as 6 percent, also buoyed by export data plus continued buying at what were seen as attractive levels. ''Today and yesterday is about the market turning back to fundamentals,'' said Jaime Nolan-Miralles, commodity risk manager at FCStone Europe. ''The price drop was too severe in my view to sustain the fundamentals in the market.'' He added, ''If we can negate the external drivers -- Japan, Bahrain, Libya -- if things are somewhat more predictable, we will be able to start tracking fundamentals.'' China's announcement that it had again increased bank reserve requirements led markets to trim gains on renewed concerns about a possible cooling in demand, but operators said the well flagged policy was largely priced in by grain markets. BRISK EXPORTS Chicago Board of Trade May wheat rose 4.47 percent to $7.42 a bushel by 1241 GMT. CBOT May corn gained 5.18 percent to $6.80. Both crops saw their biggest gains in five months on Thursday. After trading at its limit-up of 30 cents, corn has an expanded limit of 45 cents for Friday. May milling wheat futures in Paris were up 4.13 percent at 233.00 euros a tonne, after rising earlier to 237.50 euros, a highest level since March 9. European maize futures climbed 3.53 percent to 227.00 euros while rapeseed was up 2.27 percent at 449.75 euros. Weekly export data issued by the U.S. Department of Agriculture on Thursday showed corn sales at the highest level in three weeks at 1.3 million tonnes and wheat sales also the highest in three weeks at 858,700 tonnes. Corn futures got a boost from market talk that China had purchased as much as 500,000 tonnes of corn from the United States. China, which bought U.S. corn for the first time in four years in 2010, has not inked any new deals since October. In Europe, wheat export volumes saw a two-month high. Dry weather in some U.S. growing areas also underpinned wheat prices, traders said. In the soybean market, May soybeans was up 0.97 percent at $13.48-1/4 a bushel. Weekly U.S. soy export sales were below estimates at 214,500 tonnes, but the May contract received support from excessive rains in Brazil, which are disrupting the soybean harvest there. * Prices as of 1241 GMT Product Last Change Percent Move End 2010 Ytd Percent CBOT wheat 742.00 31.75 +4.47 794.25 -6.58 CBOT corn 680.00 33.50 +5.18 629.00 8.11 CBOT soybeans 1348.25 13.00 +0.97 1393.75 -3.26 CBOT rice 13.55 0.29 +2.14 14.00 -3.18 Paris wheat 233.00 9.25 +4.13 252.20 -7.61 Paris maize 227.00 7.75 +3.53 235.00 -3.40 Paris rapeseed 449.75 10.00 +2.27 497.25 -9.55 Crude oil 101.32 -0.10 -0.10 91.38 10.88 Euro/dlr 1.41 0.01 +0.85 1.34 5.71 *Front month contracts. CBOT contracts in cents per bushel except rice which is in dollars per hundredweight. Paris wheat in euros a tonne and London wheat in pounds per tonne.

(SourceL http://www.deepikaglobal.com/ENG5_sub.asp?ccode=ENG5&newscode=50664)