Reuters — Chicago wheat futures climbed two per cent on Monday, extending last week’s rally on worries over potentially lower crop yields in the U.S. Plains.
Wheat’s gains helped pull corn and soybeans close to the multi-week highs they touched on Friday.
Weather concerns encouraged investors to cover short positions, said Mark Schultz, chief analyst at Northstar Commodity Investments in Minneapolis. Among the concerns were forecasts for rain as Kansas farmers look to start harvesting winter wheat, and hot, dry weather in Western Canada.
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“People maybe are leaning more to less short positions in wheat and corn and (soy)beans, saying ‘we’ll slow down a bit until we get something harvested,'” Schultz said.
The weak U.S. dollar and short covering by funds were wheat’s main support, more than supply concerns, said Dan Basse, president of AgResource Co. in Chicago.
Wheat for July delivery on the Chicago Board of Trade gained 11 cents, or 2.1 per cent, to $5.28 a bushel (all figures US$). The front-month contract gained 8.4 per cent last week.
Wheat touched a two-month high of $5.34 on Friday amid uncertainty about the quality of hard red winter wheat in the southern U.S. Plains following heavy rains in Oklahoma and Texas.
Grain analysts were expecting winter wheat conditions to hold steady at 44 per cent good to excellent, in the U.S. government’s weekly progress report due Monday afternoon. Head scab has emerged in winter wheat in parts of Kansas, the biggest U.S. producer.
Traders also eyed the next monthly supply and demand report from the U.S. Department of Agriculture on Wednesday.
In Western Europe, concern is mounting over the impact of dry conditions on crops, with little rain in sight in the next two weeks in the main producing regions, European traders and analysts said.
Comfort could come from the Black Sea region, where favourable spring weather and a larger sowing area could help Ukraine and Russia increase harvests this year.
CBOT corn rose 4-3/4 cents or 1.3 per cent to $3.65-1/4 per bushel, close to Friday’s peak of $3.67-1/4, its highest level since May 22.
Corn rose on the U.S. dollar’s weakness and spillover support from wheat, traders said.
Soybeans gained 6-1/2 cents, or 0.7 per cent, to $9.44-1/4, not far off Friday’s high of $9.52, which was its loftiest level since May 19.
Soymeal advances also pulled soybeans higher, and concern about planting delays in states such as Missouri, Kansas and Nebraska added support.
— Rod Nickel and Julie Ingwersen are Reuters correspondents covering the ag sector from Winnipeg and Chicago respectively. Additional reporting for Reuters by Manolo Serapio Jr. in Singapore and Sybille de La Hamaide in Paris.
