Chicago Board of Trade (CBOT) wheat futures jumped 1.3 per cent on Thursday, posting its biggest one-day advance in two weeks on concerns about production declines in the U.S. Plains hard red winter wheat belt due to freeze damage while soybeans leaped 1.4 per cent, the most in a month, on soaring U.S. cash soy markets.
Kansas City Board of Trade (KCBT) hard red winter (HRW) wheat for May delivery leaped 3.3 per cent, or 24-3/4 cents per bushel ending the session at $7.63-3/4 per bushel, posting the biggest one-day advance for a spot KCBT wheat futures contract in five months (all figures US$).
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Wheat traded on the KCBT is the kind grown in the Plains states of Kansas, Oklahoma and Texas, the area affected by a series of freezes in April.
Support to grains and the soy complex also stemmed from outside markets with a big rebound in gold and a weak dollar cited as influences.
“We have an overall commodity short-covering scenario here. Everything from copper to crude oil is up, grains and livestock are included,” said Mike Zuzolo, analyst for Global Commodity Analytics.
“About every major currency is up against the dollar, grains have picked up on that and livestock too.”
Gold was soaring nearly three per cent and crude oil up over two per cent when grain futures neared their close of trading at 1:15 p.m. CT.
Corn rode the coattails of soybeans and wheat to a higher close with a sale of U.S. corn to global consuming giant China contributing to the advances.
U.S. weather issues also continued to rattle the corn market with bullish input from slow seedings pitted against bearish influences from recent improved soil moisture profiles in the drought-stricken U.S. Midwest.
CBOT wheat reversed three consecutive days of declines led by soaring KCBT hard red winter wheat futures tied to concerns about production declines following a series of April freezes in the U.S. Plains hard red winter wheat producing region.
“There is demand for the Kansas City market because of expected losses of production from previous sub-freezing temperatures,” said Shawn McCambridge, analyst for Jefferies Bache.
“We have the wheat quality tour next week and that will give us a better idea of what has happened, but I think everyone is expecting production declines.”
The annual Wheat Quality Council tour of Kansas wheat fields will be next week and freeze damage results from southern Kansas and also the Texas and Oklahoma Panhandle regions are expected to be reported by the tour.
Traders and analysts said the soybean futures market found solid support from the strong cash soy markets in the U.S. due to tight stocks, slow farmer selling and slow shipments of soy from South America’s bumper harvest.
U.S. soybean cash basis bids rose to new seasonal record highs at many processing plants in the Midwest, and offers for soymeal also gained as farmers held tight to the thin stockpile of supplies remaining from last year’s harvest, dealers said.
CBOT soybeans for May delivery were up 19-1/2 cents at $14.23-1/2 per bushel, May delivery corn was up 5-3/4
cents at $6.45-1/2, and wheat for May delivery was up 9-1/2 cents at $7.01-1/4.
Gains for each commodity were trimmed by a slower-than-expected export sales pace for each as seen in the U.S. government’s weekly export report.
“There may not be much follow through since the export sales weren’t so good, on about everything but corn,” Zuzolo said.
The U.S. Department of Agriculture’s (USDA) weekly export sales report released on Thursday showed last week’s export sales of wheat and soybeans well below analysts’ estimates, while corn exports were within the range of estimates.
USDA reported corn sales at a four-week low, net wheat sales at an 11-week low, and net soybean sales at a two-week low.
China made its first old-crop soybean cancellation in 10 weeks and bought its largest new-crop volume in a month, according to the USDA report.
China is the world’s largest buyer of soybeans. In its daily export report on Thursday, USDA said 540,000 tonnes of U.S. corn were sold to China and an unknown destination.
Corn plantings should gain traction
Traders in the corn market continued to weigh the cost of planting delays due to cold, wet weather against the benefit of valuable additions of moisture to drought-depleted soils.
Corn plantings should speed up next week. Drier, warmer weather over the next two weeks should boost U.S. corn seedings and aid growth of the winter wheat crop, an agricultural meteorologist said.
Planting weather, while improved, will be less than ideal since there will be some showers early next week, mainly in the northwestern Midwest, spreading eastward next Wednesday and Thursday, said Commodity Weather Group (CWG) meteorologist Joel Widenor. “Temperatures will be warming into the (20s C) by Sunday,” he said.
Excessive wet, cold weather in the U.S. crop belt has stalled corn and spring wheat seedings and further harmed the winter wheat crop, which struggled through the winter due to last season’s drought.
USDA, in its weekly crop progress report on Monday, said only four per cent of the U.S. corn crop had been planted — up from two per cent a week earlier but well behind the 16 per cent five-year average for the week.
Thirty-five per cent of the U.S. winter wheat crop was in good-to-excellent condition, down from 36 per cent a week earlier and well below the 63 per cent of a year earlier.
Only seven per cent of the U.S. spring wheat crop had been planted, up from six per cent a week earlier but well behind the 24 per cent five-year average.
— Sam Nelson reports on the CBOT grain and soy futures markets for Reuters from Chicago.
