Wheat up for 2nd day as dryness threatens US crop
SINGAPORE — Chicago wheat futures rose for a second session on Monday, with prices underpinned by forecasts that hot and dry weather could hit US production.
Soybean prices gained more ground on strong demand, although gains were trimmed by record South American supplies.
The Chicago Board of Trade (CBOT) most-active wheat contract had climbed 0.50% to $4.313/4 a bushel by 0304 GMT, having closed up 0.10% on Friday.
Soybean futures rose 0.20% to $9.23 a bushel and corn advanced 0.30% to $3.74 a bushel.
“Dryness and hot weather are causing concerns for the US wheat crop. Adverse weather will continue to support wheat prices this week,” said Kaname Gokon from Tokyo brokerage Okato Shoji. “We could see prices rise above $4.35 a bushel this week.”
Wheat was supported by forecasts of warm and dry weather in the northern US Plains, potentially stressing newly planted spring wheat, and as excessive rains have swamped fields in the southern Plains and the Midwest.
The US Department of Agriculture (USDA) has rated 62% of the US spring wheat crop as good to excellent, down significantly from 79% a year earlier. Weekly USDA export sales data for soybeans came in above trade expectations, and the government through its daily reporting system said private exporters sold 200,000 tons of US soybeans to Spain, which has struggled with drought.
But plentiful supplies capped gains in soybean markets.
Informa Economics, a private analytics firm, on Friday raised its estimate of Brazil’s 2016/ 17 soybean harvest to 114.5 million tons, from 113 million last month, trade sources said.
In a monthly report, the firm also raised its forecast of Argentina’s 2016/17 soybean crop to 58 million tons, from 56.8 million in May.
Large speculators increased their net short position in CBOT corn futures in the week to May 30, regulatory data released on Friday showed.