Chicago | Reuters — U.S. wheat futures climbed to multimonth highs Thursday on a mix of short-covering and worries about the size of the hard red winter wheat crop in top producer Kansas, traders said.
Soybeans rose, staging a late-session rally that some traders attributed to optimism about the outcome of U.S. trade talks with top global soy buyer China. Corn also advanced.
At the Chicago Board of Trade, July soft red winter wheat futures ended up 11-1/4 cents at $5.38 a bushel (all figures US$). CBOT July soybeans settled up 10-1/4 cents at $10.53-1/4 a bushel and July corn was up three cents at $4.08 a bushel.
Technical buying in CBOT wheat accelerated as the July contract surpassed Wednesday’s top and reached $5.38-1/2 a bushel, its highest since Aug. 1.
The market got a lift late in the session as scouts on a Wheat Quality Council crop tour projected the winter wheat yield in Kansas, the top U.S. wheat state, at 37 bushels per acre. The scouts pegged Kansas wheat production at 243.3 million bushels, potentially the smallest crop since 1989, reflecting the impact of drought.
“The tour called Kansas production 243 million bushels, which puts them a good 30 million bushels less than the trade,” ED+F Man Capital analyst Charlie Sernatinger said in a client note.
K.C. July hard red winter wheat ended up 12-1/2 cents at $5.67-3/4, its fifth straight higher close, after reaching $5.68-1/2, its highest since July 21.
Soybeans advanced after a back-and forth session, turning up in the final 15 minutes of the session on a mix of technical buying and optimism about the outcome of U.S. trade talks with top global soy buyer China.
“The U.S. trade team started negotiations in China, and make no mistake about it, this is the driving fundamental for the moment on beans,” Sernatinger wrote.
CBOT July soyoil rose for a second straight session, buoyed by stronger-than-expected weekly U.S. export sales and confirmation that private exporters sold 30,000 tonnes of U.S. soyoil to Peru.
July corn hit its highest since Aug. 10 as traders continued to fixate on dry weather that is stressing second-crop corn in Brazil.
“Rains are expected to remain very limited across the region this week, with just a few showers expected in northwestern Mato Grosso. This will allow soil moisture shortages to continue to expand northward,” Radiant Solutions said in a daily crop weather note.
Meanwhile, rain in Argentina has slowed the harvest of corn and soy crops that were slashed by drought earlier in the season.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago.