U.S. grains: Chicago wheat above $5 on U.S., Canadian concerns

Chicago | Reuters — Chicago Board of Trade wheat futures closed above US$5 a bushel on Friday for the first time in a year, buoyed by diminishing outlooks for spring wheat crops in both the U.S. and Canada, analysts said.

CBOT soybean futures rose about three per cent and corn futures also followed the firming trend, despite bearish U.S. plantings and stocks data.

On the Minneapolis Grain Exchange, spot spring wheat futures set a fresh three-year high at $7.80-3/4 a bushel before ending at $7.67-3/4 (all figures US$). The contract soared nearly $2 a bushel in June, or 34 per cent, its biggest monthly climb since 2010.

Most-active CBOT September wheat closed up its 30-cent daily limit Friday at $5.26 a bushel while front-month July, which is in delivery and trading without limits, ended up 30-3/4 cents at $5.11.

CBOT August soybeans settled up 26-1/4 cents at $9.47 a bushel and September corn rose 11-1/2 cents at $3.81 a bushel.

Wheat advanced on prospects for tightening spring wheat supplies. In a long-anticipated acreage report, the U.S. Department of Agriculture cut its estimate of U.S. spring wheat plantings to 10.9 million acres, down from its March forecast of 11.3 million and below a range of trade expectations.

The government projected harvested acres at 10.5 million, but some analysts expected that figure would fall, given drought conditions in the northern Plains spring wheat belt.

“The big thing is spring wheat acres coming in well below expectations,” said Brian Hoops, analyst at Midwest Marketing Solutions. “When we get to harvested acres in July, spring wheat acres will be sharply lower, with more abandonment. That’s the real bullish standout news,” Hoops said.

Canadian farmers also planted slightly less wheat than expected, according to a Statistics Canada report issued on Thursday.

Soybean futures climbed after the USDA’s 2017 soybean plantings and June 1 stocks figures fell below their respective average trade estimates.

Corn followed, but its rise was capped by larger-than-expected U.S. plantings and quarterly stocks figures.

“The (corn) stocks number implies that the USDA may be about 100 million bushels too high on their corn feeding. And then you gain 900,000 acres from the prospective plantings report, so you’ve added supply here,” said Dan Cekander of DC Analysis.

— Julie Ingwersen is a commodities correspondent for Reuters in Chicago. Additional reporting for Reuters by Nigel Hunt in London and Naveen Thukral in Singapore.

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