PARIS/CANBERRA: Chicago wheat futures rose on Thursday, recovering from a drop during the previous session and supported by renewed concerns about drought in the US Plains and higher oil prices as the Strait of Hormuz remained blocked.
News of a large wheat import tender by Saudi Arabia, which is seeking 710,000 metric tons, also lent impetus to wheat prices.
Corn and soybean futures edged higher, though technical resistance curbed gains.
The most-traded wheat contract on the Chicago Board of Trade was up 1.1percent at USD6.13-3/4 a bushel, as of 1020 GMT.
The benchmark had turned lower on Wednesday after reaching a three-week high, with US rain forecasts and a raised forecast for Russia’s 2026 wheat crop by consultancy Sovecon easing supply concerns.
But some weather charts suggested southwestern parts of the Plains may not get rain relief in the coming days, while in western Europe a dry spell was starting to raise doubts about crop conditions.
“A week ahead, the driest parts of the Plains may miss the rains again,” CM Navigator analyst Donatas Jankauskas said. “Europe is also becoming increasingly dry.”
Crude oil rose about 2percent, with Iran’s seizure of two vessels in the Strait of Hormuz maintaining concern about prolonged disruption to shipping while peace talks between the US and Iran remained on hold.
The Iran war has raised the cost of fuel and fertiliser that are crucial inputs for farming, threatening to weigh on planting and crop yields in the coming months. A huge urea purchase by India is set to further tighten fertiliser supply.
“Crude oil is again supporting the agriculture complex,” Peak Trading Research said. “Weather concerns and bullish April seasonals are additional pillars pointing to higher prices.” Showers that could slow US planting have lent some support to Chicago corn and soybeans, though large expected South American harvests remained a curb on prices.
CBOT corn added 0.5percent at USD4.65 a bushel and CBOT soybeans inched up 0.1percent to USD11.81. Soybeans were capped by weakness in soyoil, which was easing from contract highs this week.
Comments