Chicago | Reuters — U.S. wheat futures climbed nearly two per cent on Monday due to weather-damaged crops in key production areas around the world, while corn and soybeans firmed as wet U.S. Midwest conditions stoked concerns about reduced harvests.
Some optimism that U.S.-China trade talks may get back on track also underpinned markets. The countries’ two leaders are due to meet this week at the G20 summit in Japan.
Much of the market’s focus remains on weather.
A heat wave taking hold in Western Europe, dry conditions in Western Canada and overly wet weather in winter wheat production areas of the United States have raised the risk of yield losses and tempered recent expectations of bumper global supplies.
The stressful conditions and concern over crop damage countered seasonal supply pressure on wheat prices as harvests get going across the Northern Hemisphere.
“The heat will be detrimental for crops in reproductive development looking to rebound from last season’s crippling drought,” Refinitiv Agriculture Research analysts said, noting temperatures would be over 10 degrees above normal.
Chicago Board of Trade September soft red winter wheat rose 11-3/4 cents to $5.42-1/2 a bushel, while September hard red winter wheat gained 13 cents to $4.77-1/2 a bushel (all figures US$).
U.S. corn and soybean planting and crop development remains behind normal due to excessive rains this spring. Both markets have been lifted recently by delayed planting and by fears that overly wet conditions would dent yields.
CBOT July corn rose 4-1/2 cents to $4.46-3/4 a bushel and July soybeans gained 6-1/4 cents to $9.09 a bushel.
“At this point, until the crop starts getting better, the path of least resistance is up. And even, there are questions about how much of the damage is irreversible,” said Jim Gerlach, president of A/C Trading.
The U.S. Department of Agriculture (USDA) is due to release its weekly crop progress and condition report after the close on Monday.
Analysts, on average, expect 96 per cent of U.S. corn to have been planted as of Sunday along with 88 per cent of soybeans. Corn and soy crops were also estimated to be 59 per cent in good-to-excellent shape.
Grain markets are awaiting revised USDA acreage estimates on Friday to gauge the impact of torrential rain on U.S. grain belts this spring. Analysts caution that data would not be fully accurate as some farmers in waterlogged areas are still modifying their planting plans.
— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.