Chicago | Reuters — U.S. wheat futures surged more than four per cent on Monday as recent floods in parts of Texas and forecasts for continued dry weather in the U.S. Plains buoyed the market that had been falling in recent weeks.
Futures prices for corn crept higher as U.S. farmers continued to cling to their stockpile of corn.
Chicago Board of Trade December wheat closed up just over four per cent to $5.09 a bushel, while corn was up 1.3 per cent at $3.84-1/2 a bushel (all figures US$).
Read Also
U.S. livestock: Cattle futures slip on demand concerns as beef prices turn lower
Chicago Mercantile Exchange cattle futures dipped on Tuesday as gains fueled by tight cattle supplies and strong demand faded amid concerns that high beef prices and cooling weather could soon affect retail meat sales, analysts said.
November soybeans closed down 1.1 per cent, to $8.85 a bushel, on Monday.
Traders bought corn and sold soybeans in a spread trade linked to uncertainty over Argentina’s crop export policy and an expected peso devaluation. The country’s presidential election on Sunday triggered a runoff in November.
Rain in dry areas in Brazil, which could help bolster the recently planted crop, also pressured soybean prices.
Weather also underpinned wheat futures on Monday, as a lack of rain in the U.S. Plains fuelled traders’ fears of a threat to winter crop yields. Dry weather in Russia, another key exporter, is also supporting prices.
Torrential rain in the wake of Hurricane Patricia has led to flooding across a swath of southern and southeast Texas, but the rains missed dry wheat production areas in Oklahoma and top producer Kansas.
Some traders are keeping a close eye on whether the markets could show more volatility this week after the Federal Reserve holds a policy meeting on Tuesday and Wednesday. One key question: whether Federal Reserve chair Janet Yellen can keep a December interest rate rise in play.
“I’m waiting to see whether they finally will do something about interest rates,” said Joe Camp, risk management specialist at Agrivisor.
Fed officials have pledged that any rate rise would not come as a surprise to markets. But the markets have been betting that the first hike in a decade will come in March 2016 at the earliest.
Wheat traders were also monitoring renewed dry weather forecasts in Ukraine. The country received some rainfall last week but traders were concerned it may not be sufficient to compensate for a severe drought that the agriculture minister had said could cause Ukraine’s winter wheat acreage to shrink by more than 10 per cent.
— P.J. Huffstutter reports on the agriculture sector for Reuters from Chicago. Additional reporting for Reuters by Sybille de La Hamaide in Paris and Naveen Thukral in Singapore.
