PARIS/SYDNEY: US wheat futures rose to a new 1-year high on Thursday, taking gains this week to 6 percent as prices rose on fears that hot, dry weather in several major exporters will curb global output.
Soybeans extended losses after falling nearly 2 percent in the previous session on concerns that US President Donald Trump would intensify a trade battle with China, the world's biggest importer of the oilseed.
Corn rose in the wake of the wheat rally.
The most active wheat futures on the Chicago Board of Trade were up 1.7 percent at $5.67-3/4 a bushel by 1142 GMT, after touching $5.68, their highest since July, 2017. It closed up 0.8 percent in the previous session.
"The likely fall in wheat production across the globe this season is still sinking into the wheat market's collective consciousness," said Tobin Gorey, director of agricultural strategy, Commonwealth Bank of Australia.
Wheat production in Australia's New South Wales state is expected to drop to around 3.5-4.2 million tonnes from a five-year average of 7.1 million tonnes as severe drought curbs yields, analysts and traders said on Thursday.
In Germany, the European Union's No. 2 grain producer, the 2018 grains harvest will slump about 20 percent on the year to around 36 million tonnes, after crops suffered massive damage from drought and a heat wave, according to German farmers association DBV.
In Europe, benchmark milling wheat on Paris-based Euronext, hit a more than five-year high of 213.25 euros ($247.7) per tonne as worries mounted about global wheat supplies.
The most active corn futures were up 0.9 percent at $3.83 a bushel in the wake of the rally on wheat futures, having closed down 1.8 percent in the previous session.
The most active soybean futures were down 0.6 percent at $8.96-1/4 a bushel, having closed down 1.9 percent on Wednesday.
The administration of US President Donald Trump plans to propose a 25 percent tariff on $200 billion in Chinese imports, instead of a 10 percent tariff.
An intensified trade war could affect sales of US soybeans to China, which imported around $12 billion of the oilseed last year.
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