U.S. grains: Wheat, soy futures hit multi-year highs

Dry weather in U.S., Russia, Argentina supports wheat prices; soybeans, corn rise as Brazil also dry for planting

Chicago | Reuters — U.S. wheat and soybean futures soared to multi-year highs on Wednesday as unfavourable weather threatened production in exporting countries.

Dryness has raised concerns among traders about the prospects for wheat planting in the U.S. Plains and the Black Sea region and for soybean planting in Brazil.

Weather in the southern U.S. Plains wheat belt is expected to remain mainly dry over the next six to 10 days, with above-average temperatures, according to broker Country Hedging.

“Dry planting conditions in the U.S., Russia and Ukraine, as well as dry growing conditions in Argentina, weakened yield prospects around the globe,” said Jacqueline Holland, market analyst for Farm Futures.

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The most-active Chicago Board of Trade (CBOT) wheat contract ended up 14-3/4 cents at $6.07-1/2 a bushel after rising to $6.11-1/2, its highest price since July 2015 (all figures US$).

CBOT soybeans closed up seven cents at $10.51 a bushel after rising to $10.59-3/4, their highest since April 2018. Deferred soy futures ended lower.

Corn settled 3-3/4 cents firmer at $3.88-3/4 a bushel and reached $3.92, its highest price since January.

Traders said delayed soybean plantings and harvests in Brazil could extend the export season for U.S. soy on the global market. The U.S. and Brazil compete for sales to countries such as China, the world’s top soybean importer.

The U.S. Department of Agriculture on Wednesday reported private sales of 132,000 tonnes of U.S. soybeans to China and 120,000 tonnes to unknown destinations.

U.S. agricultural exports to China hit $2.15 billion in August, the most ever for the month, led by strong soybean exports.

“The strong Chinese demand for U.S. beans has been driving prices, but yesterday the trade began to talk about the concerns about the South American crop in earnest,” said Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage in Iowa.

Traders will review weekly U.S. export sales data on Thursday and monthly supply/demand data on Friday.

— Reporting for Reuters by Tom Polansek in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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