Chicago | Reuters — Chicago wheat futures set a one-month high Wednesday on technical buying and worries about dry conditions in the Midwest that helped the market rally after a weak start, traders said.
Corn and soybeans also turned up, shaking off early pressure tied to the expanding harvest of both crops in the U.S. Midwest.
Chicago Board of Trade December wheat settled up 7-3/4 cents at $4.61-1/2 per bushel after reaching $4.62-3/4, its highest level since Aug. 15 (all figures US$).
CBOT November soybeans ended up 2 cents at $9.65-1/2 a bushel after dipping to $9.58, a two-week low. December corn finished up 1-3/4 cents at $3.54 a bushel, rebounding after nearing a one-week low at $3.48-1/2.
Wheat has been trending higher for most of September and open interest has been declining, a possible sign of commodity funds paring a sizeable net short position.
Traders also have been adjusting positions ahead of the U.S. Department of Agriculture’s small grains report on Friday; analysts expect the government to lower its estimate of U.S. 2017 wheat production.
As well, some analysts noted dry conditions in parts of the Midwest, where farmers are planting the 2018 soft red winter (SRW) wheat crop.
“The drought in U.S. SRW wheat areas, which will not allow winter wheat to germinate until it rains, was supportive for Chicago wheat futures,” DC Analysis president Dan Cekander said in a note to clients.
CBOT soybeans and corn turned up despite near-optimal weather in the Midwest that should boost harvest progress. A spell of unseasonably hot weather over the last week likely helped advance crop maturity.
“The weather is looking like it’s as good as it gets, and yields are hanging in maybe better than everybody expected. Not a lot of positive news (for prices),” said Mark Schultz, chief analyst at Northstar Commodity Investment Co.
CBOT soyoil futures fell on follow-through selling, a day after the U.S. Environmental Protection Agency said it was seeking comment on a proposal to reduce biodiesel blending requirements into the domestic fuel supply.
Soybean oil is the primary U.S. feedstock for biodiesel fuel.
Corn firmed. Some market participants have begun scaling back positions ahead of Friday’s USDA quarterly stocks report.
Analysts expect USDA to report U.S. corn stocks as of Sept. 1 at 2.353 billion bushels, which would be the largest Sept. 1 stocks since 1988, if realized.
— Julie Ingwersen is a commodities correspondent for Reuters in Chicago.