Chicago | Reuters — U.S. wheat futures rose nearly two per cent on Wednesday on poor weather in the Midwest soft winter wheat belt and the northern Plains spring wheat region, traders said.
Soybean and corn futures closed modestly higher.
Chicago Board of Trade May soft red winter wheat settled up 8-1/4 cents at $4.64-3/4 a bushel, while Minneapolis Grain Exchange May spring wheat finished up 6-1/4 cents at $5.71-1/2 per bushel after reaching $5.73-1/2, its highest level since Feb. 14 (all figures US$).
CBOT May soybeans ended up two cents at $9.06 a bushel. May corn rose 1/4 cent to $3.71-1/2, staying within the previous day’s range.
Wheat posted the biggest advance on a percentage basis, led by MGEX spring wheat. Heavy snows and the anticipation of floods in the northern Plains spring wheat belt, particularly in top producer North Dakota, have raised the risk of delays in planting the 2019 crop. Seeding normally begins in April.
“I think they are scared to death of not getting (spring) wheat planted,” said Roy Huckabay with Linn + Associates, a Chicago brokerage.
Also, domestic cash values for spring wheat have been strong in recent days, reflecting logistical hurdles that have slowed the movement of the 2018 spring wheat harvest.
Some traders expressed worry about yield potential for soft red winter wheat in saturated portions of the U.S. Midwest and Delta.
“There is some concern about soft red wheat areas that are too wet,” said Tom Fritz, a partner with EFG Group in Chicago.
Commodity funds hold sizable net short positions in CBOT wheat, corn and soy futures, leaving those markets vulnerable to bouts of short-covering.
Soybeans firmed on technical buying and hopes for progress in U.S. trade talks with China, the world’s top soybean importer.
U.S. President Donald Trump said a trade deal with Beijing was coming along nicely, with U.S. trade negotiators poised to head to China next week for another round of talks.
Asked about lifting tariffs on China, Trump said, however: “We’re talking about leaving them for a substantial period of time because we have to make sure that if we do the deal,” China abides by it.
China has bought several million tonnes of U.S. soybeans during a negotiating truce, but prospects for an agreement remain unclear.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.