Chicago | Reuters—Chicago Board of Trade wheat futures surged to a two-week high on Tuesday, as a weaker dollar and an unexpected decline in U.S. crop ratings encouraged more short-covering after prices hit a five-year low last week.
Corn futures followed wheat higher and hit a one-week high, as traders watched for fresh news about U.S. trade talks. Soybeans also turned higher amid a spate of short-covering in a choppy trading session, as market participants tried to glean information about whether recent rains have caused material damage to South America’s crop.
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U.S. wheat futures closed higher on Thursday on concerns over the limited availability of supplies for export in Russia, analysts said.
Argentina’s agricultural heartland has been lashed by heavy rains in recent days, bringing widespread flooding and leaving some soy fields underwater with up to 400 millimeters (15.75 inches) of precipitation recorded in certain areas.
The most-active CBOT soybean contract Sv1 settled up 2-1/4 cents at $10.53 a bushel, while corn Cv1 ended up 7 cents at $4.54-1/2 a bushel. The most-active wheat contract Wv1 closed up 17 cents at $5.46 a bushel, the highest price since May 5.
Wheat futures were the focus for many traders, who have been closely tracking both the condition of the U.S. crop and reports of weather issues globally, market analysts said.
In a weekly report issued after Monday’s close, the U.S. Department of Agriculture rated 52 per cent of the U.S. winter wheat crop in good to excellent condition, down 2 percentage points from last week and below analyst expectations.
China’s Central Meteorological Observatory warned that dry, hot winds this week could damage winter wheat crops in major producing areas, including Henan – a key wheat-growing province known as the country’s granary.
Karl Setzer, a partner at Consus Ag Consulting, said he had received reports from business contacts inside China of temperatures hitting 108.3 degrees F in parts of Hebei province and 106.7 degrees F in sections of Henan, along with strong winds whipping across farm fields.
“I’ve seen wheat crops handle intense heat over a few days and be OK,” Setzer said. “But you put heat with high winds, and that’s not a good combination for the health of a crop.”
—Additional reporting by Peter Hobson in Canberra and Gus Trompiz in Paris
