Chicago | Reuters—Chicago wheat surged to a two-month high on Tuesday as a decline in U.S. winter wheat conditions focused attention on weather risks to northern hemisphere crops.
Corn and soybeans also edged up slightly on U.S. spring planting risks.
Chicago Board of Trade (CBOT) July wheat WN24 rose 15-1/4 cents to settle at $6.02-3/4 a bushel, its highest point since Feb. 12, breaking through technical resistance at its 100-day moving average.
The U.S. Department of Agriculture’s (USDA) weekly crop progress report showed 50 per cent of U.S. winter wheat crop in good-to-excellent condition, down from 55 per cent a week earlier and 4 percentage points short of the average estimate of analysts polled by Reuters.
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The bigger-than-expected drop came after dry weather hit hard red winter wheat producing areas of Oklahoma and Kansas, said Mark Soderberg, an analyst with ADM Investor Services.
Dry weather in southern Russia and a cold spell in western Europe added to worries, Soderberg said.
Analysts said grains markets were seeing short-covering bursts by investment funds that hold sizable net short positions in grains.
CBOT July corn CN24 was up 2-3/4 cents at $4.52-1/2 a bushel and July soybeans SN24 added 5-1/2 cents to $11.82 a bushel.
Corn planting was a little better than expected, but heavy rains in the central portion of the country could delay progress later in the week, Soderberg said.
“It’s kind of a double-edged sword. It’s going to delay planting progress, but it’s going to help restore some of the drought areas heading into the growing season,” he said.
The USDA estimated that 12 per cent of corn had been planted as of Sunday, in-line with analyst estimates, and eight per cent of soybeans, slightly ahead of an average analyst forecast of seven per cent.
—Additional reporting for Reuters by Gus Trompiz in Paris and Naveen Thukral in Singapore
