Wheat prices were firm on Tuesday with the US futures trading close to a 19-week top hit in the last session on concerns over supplies next year. Corn edged higher as hot weather and limited rainfall in Argentina fuelled worries about crop prospects in the world's second-largest corn exporter. Chicago Board of Trade March wheat ticked 0.16 percent higher to $7.70-3/4 a bushel by 1052 GMT after matching on Monday a 19-week high of $7.76-1/2 posted last week.
January milling wheat futures in Paris were up 0.25 euros to 241.25 euros a tonne by 1055 GMT, following the US markets. CBOT corn for March delivery added 0.5 percent to $6.02-1/2 a bushel, while soyabeans for January rose 0.23 percent to $13.18-1/4 a bushel. US wheat is on track to post its first annual gain in three years after dropping 42 percent in the past two years.
Wheat got a boost this year from a drought which decimated the Russian crop and halted exports, and rains which reduced the quality of Australian wheat. Dry weather in parts of the US Plains also raised concerns about the winter wheat crop as is enters dormancy. Renewed talk that Russia may prolong its grain export ban beyond next July was also supportive as US exports would benefit. Still, farmers in Australia are making some progress as the dry weather has given them opportunity to seed up harvest, although quality remains an issue.
"The focus is on harvest in Australia and certainly there has been some progress," said Brett Cooper, senior manager for markets at FCStone Australia. "There is some significant amount of quality downgrade but the amount of that downgrade to feed quality is less than what the market had feared," Cooper said.
Corn and soyabean futures are closing in on their second straight year of gains, with the latest round of support coming from poor rains in Argentina. Much-needed weekend rains in Argentina fell short in some areas, putting pollinating corn and recently planted soyabeans at risk of lower yields.
Ten percent of the Argentine corn crop had pollinated, 30 percent was in the process of pollinating and 50 percent was set to begin the process in about two weeks, said agronomist Michael Cordonnier of the Soyabean and Corn Advisor consultancy in the Chicago suburb of Hinsdale, Illinois.
The corn market also remains underpinned by Friday's estimates of lower acreage in 2011 by Informa Economics. The analytical firm lowered its forecast of US corn plantings for 2011 and added acres to its soyabean forecast, citing rising projected returns for new-crop soyabeans.
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