Chicago | Reuters – U.S. wheat futures jumped to their highest level in more than a week on Wednesday as dry weather fuelled concerns about crop conditions in the key Plains region, analysts said.
Soybean and corn futures also topped one-week highs following recent sales of U.S. soy to top importer China.
Wheat and soybean prices have rebounded after falling last week to October lows, with traders waiting for the U.S. Department of Agriculture to issue crop reports next week.
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Winter wheat conditions in focus
On Tuesday, USDA data showed that condition ratings for U.S. winter wheat crops fell during December in Kansas, the top U.S. winter wheat producer, and other Plains states.
The decline caught traders’ attention, said Rich Nelson, chief strategist for Allendale. However, dry weather at this time of year does not affect crop yields, he said.
“It’s a psychological story,” Nelson said, adding that rains in the spring were more important to determining yields.
Most-active wheat futures Wv1 closed up 7-1/2 cents at $5.18 per bushel at the Chicago Board of Trade, and K.C. March hard red winter wheat KWH26 ended 10 cents higher at $5.31-1/2 per bushel. Both hit their highest level since December 29.
CBOT corn futures Cv1 ended 2-3/4 cents higher at $4.46-3/4 per bushel, while soybeans Sv1 increased 10-3/4 cents to $10.67 per bushel.
The markets recovered from losses on Tuesday as traders monitored investor flows linked to annual changes in the composition of commodity indexes. They also adjusted positions before USDA’s crop reports on January 12.
Traders await crop data
The USDA was scheduled to issue estimates for U.S. winter wheat plantings on January 12, along with estimates for last year’s corn and soybean yields and other data.
The agency may trim its corn yield estimate due to dry weather at the end of last year’s growing season, traders said.
On Tuesday, the USDA confirmed exporters sold 336,000 metric tons of U.S. soybeans to China as the world’s top importer continued purchases after a late-October trade truce with Washington.
Chinese state stockpiler Sinograin bought 10 U.S. soybean cargoes this week, totalling about 600,000 tons, three traders told Reuters on Tuesday.
Sales of U.S. soybeans to China will partly dent demand for Brazilian soy this year, Brazilian grain traders lobby Anec said.
-Reporting by Tom Polansek in Chicago; Daphne Zhang, Ella Cao and Lewis Jackson in Beijing; and Gus Trompiz in Paris
