U.S. grains: Wheat sets two-week high

Chicago | Reuters — U.S. wheat futures touched a two-week high above US$5 a bushel on Friday on reduced expectations for France’s harvest while corn prices rose on concerns over unfavourably hot U.S. crop weather.

Soybean futures touched a one-week low after a bout of selling late in the trading session erased earlier gains.

An escalating trade spat with China continued to hang over the soy market. Beijing has said it will impose an extra 25 per cent import duty on more than 500 U.S. goods, including soybeans, on July 6.

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Worries about the trade dispute and the weather overshadowed U.S. Department of Agriculture crop reports that showed U.S. farmers planted more corn and soybeans than previously thought and had larger stocks of the crops in storage as of June 1 than they did a year earlier.

Corn plants are highly sensitive to stressful heat and dryness in July, when the crop goes through the key stage of development called pollination. The critical period for soybeans is typically in August, making the heat wave less of a threat to that crop.

“The market doesn’t give a hill of beans of difference about acreage or stocks,” said Rich Nelson, chief strategist with brokerage Allendale Inc in Illinois. “They’re just focused on trade and new-crop weather.”

Front-month wheat futures closed up 18 cents at $4.97-1/2 a bushel at the Chicago Board of Trade (all figures US$). The contract reached a session peak of $5.04, its highest price since June 15.

Euronext wheat futures also jumped as traders said consultancy Strategie Grains slashed its forecast for this year’s French wheat harvest by more than four million tonnes to 33.2 million tonnes. That was well below other market estimates and last year’s harvest of 36.6 million tonnes.

CBOT December corn futures, which represent the crop that will be harvested this autumn, rose 5-1/4 cents to $3.71-1/4 a bushel.

Front-month soybeans slipped 2-3/4 cents to $8.58-1/2 a bushel. The contract fell to its lowest price since approaching a 10-year low on June 19 over concerns about the trade spat with China, the world’s top soy importer.

November soybean futures, which represent the autumn harvest, slumped 3-1/2 cents to $8.80 a bushel.

“At this point, the combination of a good crop and big time trade issues makes it hard to get too excited about buying the soybean market,” said Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage in Iowa.

— Tom Polansek reports on agriculture and commodities for Reuters from Chicago; additional reporting by Karl Plume in Chicago, Gus Trompiz in Paris and Colin Packham in Sydney.

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