U.S. grains: Spring wheat futures top US$7 on weather worries

Chicago | Reuters — U.S. spring wheat futures surged 3.4 percent on Wednesday, topping US$7 a bushel for the first time in nearly three years on worries that stressful weather will curb production of the high-quality milling wheat, analysts said.

The jump in Minneapolis Grain Exchange (MGEX) spring wheat lifted Chicago Board of Trade wheat as well. CBOT soybeans rose while corn drifted lower following beneficial rains in the Midwest.

CBOT July wheat settled up 4 cents at $4.57-1/4 per bushel (all figures US$). July soybeans ended up 2-3/4 cents at $9.14 a bushel while July corn fell 2-1/2 cents at $3.56-3/4 a bushel.

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MGEX July spring wheat finished up 23-1/4 cents at $7.04-3/4 a bushel after reaching $7.13, the highest spot price on a continuous chart since July 2014.

The market has soared as crop conditions in the northern U.S. Plains spring wheat region have deteriorated sharply in the last month due to hot and dry weather.

“We’ve got a crop that is really suffering and will continue to suffer. While there is lots of wheat in the world, there is not a lot of premium-quality spring wheat,” said Ted Seifried, analyst with Zaner Ag Hedge, a brokerage.

Analysts expect the U.S. Department of Agriculture on Friday to lower its estimate of U.S. spring wheat plantings for 2017.

Given anecdotal reports of farmers baling spring wheat fields this month for hay, traders will also monitor the government’s forecast of harvested acres.

CBOT soybeans firmed while corn eased after beneficial showers moved across top producer Iowa overnight. However, forecasts called for warmer and drier conditions in the Midwest after the Fourth of July holiday.

Traders were squaring positions ahead of USDA’s acreage and quarterly stocks reports, publications that often trigger sharp price movements.

“I don’t think corn or soy is going anywhere fast, at least until we see what USDA has to say on Friday morning,” said Tom Fritz, analyst with EFG Group.

The reports will coincide with the end of the month and quarter, along with first notice day for deliveries against CBOT July futures contracts.

— Julie Ingwersen is a commodities correspondent for Reuters from Chicago. Additional reporting for Reuters by Colin Packham in Sydney and Gus Trompiz in Paris.

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