Chicago | Reuters — U.S. wheat futures leaped to a five-month high on Tuesday on hopes for increased export sales, while corn and soybeans consolidated amid lingering uncertainty about the size of upcoming harvests in the Midwest.
Weakness in the U.S. dollar helped support gains in wheat prices, traders said, because a soft dollar makes American farm products look more attractive to importers.
Traders said talk of Chinese purchases of U.S. wheat triggered speculative buying, although no deals were confirmed.
Wheat supply forecasts have tightened in exporting nations such as Argentina and France due to unfavourable weather.
“A lot of the major exporters didn’t have great wheat crops,” said Jim Gerlach, president of Indiana-based brokerage A/C Trading.
The most-active Chicago Board of Trade wheat futures contract gained 11-3/4 cents to close at $5.64 per bushel and reached its highest price since April 1 (all figures US$). Funds bought an estimated 11,000 contracts, traders said.
Most-active soybeans closed 1-1/4 cents higher at $9.54-3/4 a bushel, easing back from Monday’s two-year peak of $9.66-3/4.
Most-active corn settled up 1/4 cent at $3.58. It earlier touched a one-week low of $3.51 as it eased back from Monday’s five-month high of $3.64-1/4.
Dryness in the U.S. Midwest grain belt, along with the impact of a mid-August windstorm in Iowa, have led traders and analysts to scale back previous projections for massive autumn corn and soybean harvests.
Uncertainty about the size of the harvests should continue to underpin prices for both crops, Gerlach said.
“Until you define what this crop size is, you’re going to have a hard time taking it down too far,” he said.
The U.S. Department of Agriculture, for the second straight day, said private exporters sold 596,000 tonnes of U.S. corn to China for delivery in the 2020-21 marketing year that began on Tuesday.
— Reporting for Reuters by Tom Polansek in Chicago, Gus Trompiz in Paris and Naveen Thukral in Singapore.