Wheat jumps 2.7pc to 2-year high on US weather woes

SYDNEY/SINGAPORE: Chicago wheat futures jumped 2.7 percent on Monday to hit their highest in two years as forecasts for continued dry weather in key US growing regions stoked fears of production losses.

Soybeans climbed more than 2 percent to extend two-day gains beyond 6 percent, while corn has advanced about 4 percent since Friday on the back of rally in wheat futures.

The most-active wheat contract on the Chicago Board of Trade was up 2.7 percent at $5.40-1/4 a bushel by 0445 GMT, after hitting its highest since July 2015 at $5.47-1/4 a bushel.

"US spring wheat is frying and this threatens to further reduce production, beyond (forecasts by) the US Department of Agriculture," said Andrew Woodhouse, grains analyst at Advance Trading Australasia.

The US Department of Agriculture (USDA) on Friday cut its estimate of US spring wheat plantings to 10.9 million acres, down from its March forecast of 11.3 million and below a range of trade expectations. It projected harvested acres at 10.5 million.

"In addition to dry weather issues, we have short-covering by funds," said one Australia-based commodities analyst. "We might see some profit-taking by the end of the session."

Soybeans climbed 1.6 percent to $9.70-1/4 a bushel, near the session-high of 9.78 a bushel, the highest since May. Soybeans rose 4.3 percent on Friday.

Corn rose 1 percent to $3.84-3/4 a bushel, having closed up 3.1 percent on Friday.

Gains in corn and soybeans were capped by large US plantings and higher quarterly stocks figures.

US farmers seeded a record amount of soybeans this spring, the government said on Friday, in the hope that strong export demand would soak up much of the fall harvest despite bumper crops in Brazil and Argentina that have swelled global stocks.

All-wheat plantings fell to a record low of 45.657 million acres, with ample global stocks and weak export prospects pushing US farmers away from that crop.

Corn plantings rose unexpectedly from the US Agriculture Department's March estimate.

Supplies for all three commodities remained robust, with stocks of both corn and soybeans as of June 1 the third-biggest ever for the period. Wheat stocks as of June 1 were the largest in 29 years.