CANBERRA: Chicago wheat futures climbed to a one-month high on Wednesday, supported by a soft dollar, concerns over northern hemisphere production and a bout of short-covering by speculators. Corn futures climbed to a one-week high, and soybeans rose on fears that heavy rains may have damaged crops in Argentina.
The most active wheat contract on the Chicago Board of Trade (CBOT) was up 0.8% at $5.50-1/4 a bushel, as of 0249 GMT, after reaching $5.50-1/2, its highest point since April 23. CBOT soybeans rose 0.4% to $10.56-3/4 a bushel and corn was trading 0.3% higher at $4.55-3/4 a bushel. The US dollar weakened again after cautious remarks about the US economy by Federal Reserve officials.
Wheat sank to a five-year low of $5.06-1/4 on May 13, pressured by weak demand, abundant supply, and an increase in speculative bearish positions. But hot and dry weather is threatening crops in China, with temperatures in the wheat-producing region of Henan reaching 40 degrees Celsius (104 degrees Fahrenheit) on Tuesday.
Traders believe that recent frosts in Russia have not caused significant crop damage, but high temperatures and the lack of rain over the coming months are likely to deplete the harvest in Rostov, Russia’s largest grain region, the head of the local grain lobby group said.
In the United States, an unexpected decline in winter wheat ratings has reduced optimism about the size of the upcoming harvest. Speculators’ large net short position in CBOT wheat leaves the market vulnerable to short-covering. Heavy buying by funds pushed prices up by 3.2% on Tuesday.
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