Chicago | Reuters — Chicago wheat futures gained on Wednesday as dryness in Russia and a weak crop outlook on the U.S. Plains lifted the market.
Soybeans lifted as the Brazilian currency gained against the U.S. dollar, renewing hopes of buying by China, while corn was flat as demand gains in ethanol and animal feed offset ahead-of-pace planting.
The most-active wheat contract on the Chicago Board of Trade climbed 15 cents to $5.13-3/4 a bushel, after touching a two-month low on Monday (all figures US$).
CBOT corn was down 1-3/4 at $3.19-1/2 a bushel, while soybeans added 4-1/4 to $8.46-3/4 a bushel.
Wheat prices had slumped as European rain gave hope to drought-stricken crops, but persistent dryness in the Black Sea region offered support. A decline in U.S. winter wheat crop ratings last week and below-expected crop outlook during a Kansas wheat tour this week also buoyed the market.
“This spring’s drought did irreversible damage,” said Arlan Suderman, chief commodities economist for INTL FCStone, noting that Russian crop conditions move the U.S. market more than its own crop outlook.
Suderman said the rally was the result of a pile on among traders.
“As the chart signals turned, momentum traders grabbed a hold and amplified the move,” he said.
Soybeans gained ground as China turns from Brazilian purchases to the United States.
“In the currencies, the real is up a bit, the dollar is down,” said Jack Scoville, vice-president of The Price Futures Group. “Brazil is running out of beans.”
Corn, extensively used in ethanol fuel in the U.S., lifted overnight, with recovering oil markets, but was mostly flat during midday trading amid strong spring planting progress.
U.S. farmers have made faster-than-normal progress in planting what is expected to be a huge corn acreage this year.
— Reporting for Reuters by Christopher Walljasper; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.