Chicago / Reuters – U.S. wheat futures firmed on Wednesday, with MGEX spring wheat contracts posting the biggest gains as results from a crop tour confirmed that drought in the northern Plains severely crimped harvest potential in that key growing region.
Traders also noted bargain buying in wheat futures as the benchmark Chicago Board of Trade soft red winter wheat contract and Kansas City hard red winter wheat had fallen for nine of the previous 10 sessions.
“I think the wheat is a little bit higher here this morning because the spring wheat crop tour is showing results that you would have expected,” Mark Gold, managing partner at Top Third Ag Marketing, said on Wednesday.
Bargain buying lent support to soybean futures too following a sharp sell-off on Tuesday. Corn closed firmer after earlier falling to July lows.
Traders were closely monitoring the weather as both corn and soybeans were in key development periods. Some reports of less-than-expected rain in western Iowa lent support in afternoon trading.
“In the coming weeks, the weather forecast in the U.S. will become increasingly more important for the market,” ING Bank said in a research note, stressing speculators had already switched from a net short to a net long position due to weather risk.
Chicago Board of Trade soft red winter wheat for September delivery settled up 3-3/4 cents at $4.77-3/4 a bushel.
K.C. September hard red winter wheat was 2-3/4 cents higher at $4.75-1/2 a bushel. MGEX September spring wheat was up 12-1/2 cents at $7.30 a bushel.
Spring wheat crops in central and northwestern North Dakota were showing the effects of hot, dry conditions and yield prospects were down sharply from a year ago, scouts on an annual crop tour said Wednesday.
CBOT December corn futures were up 3-3/4 cents at $3.86 a bushel and CBOT November soybeans were 7-1/2 cents higher at $10.00-1/4 a bushel.
Analysts said the real impact of heavy rainfall last weekend across the U.S. Midwest growing regions was still unclear.
“It remains to be seen whether yields will improve noticeably. After all, not all growing regions experienced the rainfall, and some areas are still suffering from an acute shortage of rain,” Commerzbank said in a note to clients.
– Additional reporting by Colin Packham in Sydney and Sybille de La Hamaide in Paris