Chicago | Reuters — U.S. wheat futures rallied to their highest in nearly nine years on Monday as ill-timed rains in Australia and rising Russian wheat prices stoked concerns about tightening supplies among the world’s top exporters.
Corn and soybeans followed wheat higher, with additional support from a waning U.S. harvest and strong domestic demand from ethanol makers and soy processors.
“The demand continues to equal or outstrip the supply in the short term,” said Don Roose, president of U.S. Commodities.
Read Also
Feed Grains Weekly: Price likely to keep stepping back
As the harvest in southern Alberta presses on, a broker said that is one of the factors pulling feed prices lower in the region. Darcy Haley, vice-president of Ag Value Brokers in Lethbridge, added that lower cattle numbers in feedlots, plentiful amounts of grass for cattle to graze and a lacklustre export market also weighed on feed prices.
“The wheat market’s leading the charge. It was hit with weather that is too wet in Australia and a little too dry in the U.S. Plains, shipping issues in southwest Canada and issues around export taxes in Russia,” Roose said.
Chicago Board of Trade March soft red winter wheat was up 23-1/4 cents at $8.57-1/2 a bushel after peaking at $8.59-1/2, the highest for a most-active contract since December 2012 (all figures US$). All futures months hit new contract highs.
K.C. hard red winter wheat futures also posted across-the-board contract highs, with the March contract ending 28 cents higher at $8.66-1/2 a bushel.
Wheat prices in Russia rose for a fifth straight week last week on strong demand. Shipments from the world’s largest exporter are down 34 per cent this season due to a smaller crop and rising export taxes.
Heavy rains, meanwhile stalled harvesting in Australia and threatened crop quality, while flooding in British Columbia has disrupted exports when global demand for wheat has risen.
Robust domestic demand for corn and soybeans amid strong margins at ethanol plants and soy crush facilities underpinned futures prices.
CBOT December corn gained six cents to $5.76-3/4 a bushel, while January soybeans added 11 cents to settle at $12.74-1/4 a bushel.
— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago; additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore.
