U.S. grains: Wheat hits week high on crop worries

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters — Chicago wheat futures rallied nearly three per cent on Friday after falling to three-week lows this week as another arctic blast across the U.S. winter wheat belt raised worries about the dormant crop, traders and analysts said.

That spurred technical buying as Chicago wheat rose to a one-week high.

“We pressed and pressed this wheat market; it needed some breathing room,” said Roy Huckabay, a grains analyst with The Linn Group.

Soybeans were also higher, notching the fourth consecutive week of gains, as a Brazilian truckers’ strike disrupted supply and grabbed attention away from an expected record harvest in South America.

“The uncertainty over the Brazilian strike situation seems to have abated but some longs are still getting in,” said Terry Reilly, an analyst with Futures International.

Brazilian truckers protesting a new fuel tax lifted their blockade of dozens of highways by Friday after police began fining and arresting protesters. But blockages remained at 59 locations across six states on Friday, down from 88 on Thursday, according to highway police.

The soybean oil market was also strong as traders exited their soymeal/soyoil spread positions on the last trading day of the month. March soyoil busted through its 100-day moving average, hitting a five-week top, after fewer-than-expected deliveries were posted against the expiring contract overnight.

Chicago Board of Trade March wheat closed 14-1/4 cents higher, or up 2.8 per cent, at $5.17-1/2 a bushel — up nearly three per cent for February (all figures US$). Kansas City March wheat also closed higher after sinking to a 4-1/2-year low of $5.17-1/4 on Thursday on sluggish exports.

Chicago March soybeans ended up 6-3/4 cents, or 0.7 per cent at $10.30-3/4. This brought the contract’s weekly gains to just over three per cent and its rise in February to seven per cent.

Chicago corn edged up 4-1/2 cents, or 1.2 per cent to $3.84-1/2, supported by an easing in the dollar after Thursday’s one-month high against a basket of currencies.

Cold weather persists across the U.S. wheat belt.

“The lack of a protective snow cover remains a concern for winter wheat in many areas from Montana to Nebraska, where widespread sub-zero temperatures were noted early today,” USDA meteorologist Eric Luebehusen said in Friday’s weather bulletin.

Traders said they were most concerned about the Nebraska wheat crop given a lack of snow cover.

Morning temperatures also plunged to -20 F (-29 C) in the upper Midwest but most of the soft red wheat crop is protected by recent snowfall, Luebehusen said.

— Christine Stebbins is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Gus Trompiz in Paris and Naveen Thukral in Singapore.

About the author

Comments

explore

Stories from our other publications