Wheat rallies to highest since July on U.S. weather woes

CHICAGO: Chicago Board of Trade soft red winter wheat futures jumped 3.9 percent on Wednesday to their highest in more than seven months, breaking through key technical barriers on support from concerns about crop development in the U.S. Plains, traders said.

The gains in the wheat market spilled over into corn, which rose to its highest since Aug. 10.

Soybean futures also rose, underpinned by worries about drought in Argentina limiting the size of the crop that will be harvested in that key export supplier.

The benchmark CBOT soft red winter wheat contract has risen for five days in a row, gaining 10.7 percent during the rally.

"The wheat market keeps moving higher on crop concerns in the hard red winter wheat area," CHS Hedging market analyst Ami Heesch said in a research note. "Dry conditions prevail in the Plains, for the next several days."

At 10:23 a.m. CST (1623 GMT), CBOT May soft red winter wheat futures were up 18 cents at $4.95 a bushel. Prices peaked at $4.99-1/2 a bushel, the highest for the most-active wheat contract since July 21.

K.C. May hard red winter wheat, which tracks the crop grown in the moisture-stressed U.S. Plains, were 18-1/4 cents higher at $5.23 a bushel.

"Wheat is again supported by worries about dryness in parts of the U.S. Plains and the impact of this on U.S. wheat conditions," said Graydon Chong, senior commodity analyst with Rabobank. "Badly needed rains in parts of the U.S. Plains are still absent especially in the Southwest."

Lack of rain in Argentina continues to threaten the soybean harvest in the third-largest producer after Brazil and the United States. Argentina is the world's largest soymeal exporter.

CBOT May soybean futures were up 6-1/4 cents at $10.55-3/4 a bushel. But technical pressure kept the gains in check after the contract failed to take out Monday's high of $10.59-1/2 a bushel.

Soybeans received additional support from news that private exporters sold 250,000 tonnes of soybeans for delivery to unknown destinations during the 2017/18 marketing year, according to the U.S. Agriculture Department.

The gains in soybeans and wheat provided a boost to corn futures. CBOT May corn was 3-3/4 cents higher at $3.83 a bushel, on track for its third straight day of gains.

"There is also support from some lateness in Brazilian soybean harvesting, which could delay Brazilian corn plantings to past their ideal planting period," Chong said.