Chicago wheat futures rose for a sixth consecutive session on Wednesday in their longest rally since June, as concerns over poor winter crop conditions in the United States and short-covering by investors supported prices.
Soybeans were little changed after two days of gains with focus on dry weather curbing yield potential in Argentina and rains delaying harvest in Brazil. Corn gained more ground to trade near Tuesday’s highest since late August.
“Investors seem to be buying heavily, ridding themselves off a hefty short position,” said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.
“The buying though will peter out once that investor short is cleared. And then the market will be left with reality of a lot of U.S. wheat at uncompetitive prices.”
The Chicago Board of Trade most-active wheat contract had gained 0.1 percent to $4.57-1/2 a bushel by 0227 GMT after earlier in the session climbing to its highest since Sept. 29, 2017 at $4.58-3/4 a bushel.
Soybeans were little changed at $10.00 a bushel, while corn added 0.1 percent to $3.62 a bushel, not far from last session’s five-month peak of $3.62-1/4 a bushel.
Condition ratings for winter wheat declined in January in several southern U.S. Plains states that have been hit by drought, including top producer Kansas, the U.S. Department of Agriculture said on Monday.
The government rated 14 percent of the Kansas winter wheat crop in good to excellent condition, down from 37 percent at the end of December and down from 51 percent in the week to Nov. 26.
Commodity funds, which hold a sizable net short position in grain futures, were net buyers of CBOT wheat, corn, soybean, soymeal and soyoil futures on Tuesday, traders said.
Concerns about dry weather in Argentina and ill-timed rains in Brazil, where farmers are trying to harvest soybeans and plant winter corn, are fuelling in futures. Brazil is the world’s top soybean exporter and No. 2 corn supplier, while Argentina leads the globe in soymeal and soyoil exports.
Argentina’s corn crop will suffer yield losses due to drought this year and the estimated planting area may drop further because dry weather in the northern part of the country has blocked late-season planting, a top Agriculture Ministry official said.
Below-normal rainfall and above-normal temperatures are expected for Argentina and southern Brazil over the next 10 days, Radiant Solutions Meteorologist Kyle Tapley said in a note to clients.
Grains prices at 0227 GMT
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