CHICAGO: Chicago Board of Trade wheat futures rallied 2.4 percent to their highest in nearly a year on Friday, with concerns about shortfalls in the US crop sparking a round of short-covering by investment funds, traders said.
Corn futures also were higher, but forecasts for rain in key growing areas of the US Midwest limited buying. Soybean futures were hovering near unchanged after a firm open, pressured by end-of-week profit-taking.
Reports of disappointing yields in early harvest of the Plains hard red winter wheat belt underpinned the market.
"It is not that we have a disaster, but it's not quite what people thought it was and the funds were caught short," said Greg Grow, director of agribusiness at Archer Financial Services.
At 10:40 a.m. CDT (1540 GMT), Chicago Board of Trade soft red winter wheat for July delivery was up 11 cents at $4.64-3/4 a bushel. The most-active contract peaked at $4.66-1/4 a bushel, its highest since June 27, 2016.
K.C. hard red winter wheat for July delivery, which tracks the crop currently being harvested in the US Plains, was 9 cents higher at $4.74-1/4 a bushel. Hard red winter wheat peaked at its highest since March 7.
MGEX July spring wheat futures were 9 cents higher at $6.41-1/2 a bushel, threatening to surpass the 2-1/2 year high hit earlier this week.
Forecaster Commodity Weather Group said that the rain outlook was still very limited in the western Dakotas and Montana during the next two weeks, which will hinder development of spring wheat in those spots.
Concerns about crops in the Black Sea region added support to wheat prices. Wheat exports from Russia, Ukraine and Kazakhstan were expected to fall 3.3 percent to 50.4 million tonnes in the upcoming season which starts on July 1, according to a Reuters poll. Production also was seen falling.
CBOT July corn futures were 2-1/2 cents higher at $3.82 a bushel.
"For the most part it's still a warm but wet forecast for the Corn Belt," ED&F Man Capital said in a note to clients. "Just what the crops need."
CBOT July soybean futures were unchanged at $9.34-3/4 a bushel.
Soybean futures had erased gains after failing to break through their weekly high. Support was noted at the 10-day and 20-day moving averages.
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