Chicago | Reuters –– U.S. wheat futures surged nearly four per cent on Monday, nearing a one-month high as cold weather threatened to stress U.S. wheat already weakened by drought, traders said.
Soybean futures rose on signs of fresh export demand and corn followed the firm trend, with wintry conditions in the Midwest adding to fears of potential planting delays.
Chicago Board of Trade May wheat settled up 18-1/2 cents at $4.90-3/4 a bushel after reaching $4.93-3/4, its highest since March 13 (all figures US$).
CBOT May soybeans ended up 13-1/4 cents at $10.47 a bushel and May corn advanced 2-1/4 cents at $3.90-3/4 a bushel.
Wheat posted the biggest gains after weekend temperatures dipped well below freezing across most of the U.S. Plains hard red winter wheat belt.
“Temperatures were not quite cold enough across Texas to cause damage to the wheat crop, but some spotty damage was possible in western Oklahoma and portions of central and western Kansas,” Radiant Solutions said in a daily weather note.
After the CBOT close, the U.S. Department of Agriculture (USDA) rated 30 per cent of the U.S. winter wheat crop in good to excellent condition, down from 32 per cent a week earlier and 53 per cent a year ago. The figure fell below an average of analyst expectations for 31 per cent.
Commodity funds hold a net short position in CBOT wheat futures, leaving the market vulnerable to short-covering rallies.
Soybeans got a boost from fresh export business, including confirmation from USDA on Monday that private exporters sold another 232,500 tonnes of U.S. soybeans to unknown destinations. The announcement followed similar sales confirmed by the government on Friday of 458,000 tonnes of soybeans.
“There are rumors and reports of exporters selling soybeans for September-October-November, and that’s got people feeling better,” said Dan Basse, president of Chicago-based AgResource Co.
“And then we’ve got snow falling across Chicago, and we’re all worried about the upcoming plantings,” Basse added.
USDA said the U.S. corn crop was two per cent planted by Sunday, in line with trade expectations but down from three per cent a year ago.
Soybean futures drew early support from comments by U.S. government officials playing down the threat of a trade war with China, despite tit-for-tat tariff proposals in the past week.
But China stepped up its attacks on the Trump administration on Monday, saying Washington was to blame for the frictions and repeating it was impossible to negotiate under “current circumstances.”
Traders were awaiting Tuesday’s monthly USDA supply/demand report that could bring revisions to projected South American corn and soybean output, along with adjustments to the U.S. balance sheet.
— Julie Ingwersen is a commodities correspondent for Reuters in Chicago; additional reporting by Gus Trompiz in Paris and Colin Packham in Sydney.