SINGAPORE: US wheat futures rose for a second day on Friday and are on track for their first quarterly gain in three as dry weather threatens winter plantings around the world.
Wheat has risen 13 percent so far in the September quarter, its best showing since the last quarter of 2010, far outpacing corn's increase of less than 1 percent. But analysts say much tighter global supplies of corn should keep it a key theme in grain markets going forward.
"The market is certainly quite concerned about the weather conditions in many parts of the world," said Luke Mathews, commodity strategist at Commonwealth Bank of Australia.
"Those issues which are adversely affecting winter wheat plantings in the Northern Hemisphere are certainly providing a bullish support to the market."
December wheat on the Chicago Board of Trade rose 0.9 percent to $6.60-1/4 a bushel by 0301 GMT, adding to a gain of 2.4 percent on Thursday, which was its biggest in more than a month.
While wheat is up 13 percent this quarter, it is down more than 11 percent in September, its first monthly drop in three months, reflecting losses spurred by a commodity-wide sell-off due to worries over a crippling debt crisis in Europe.
Wheat's gains come ahead of a US government report, due later on Friday, that is expected to show the US would cut its estimate of wheat production this year to the lowest level since 2006.
CBOT December corn rose 0.1 percent to $6.33-1/4 a bushel. For the month, corn has fallen more than 16 percent, and is up a marginal 0.7 percent for the third quarter.
"The corn market might have underperformed wheat in the quarter, but from a historical perspective corn is still the leader in the grain complex," said CBA's Mathews.
"It's likely to remain the key theme in the market over the coming months, with corn supplies much tighter than what we are seeing in the rest of the grain complex."
Corn stockpiles in the United States, the world's top exporter, at the end of the 2010/11 marketing year likely fell 44 percent to 964 million bushels, the smallest in eight years, according to analysts polled by Reuters ahead of the US Agriculture Department's quarterly stock report, also due later on Friday.
Corn prices will probably find support at the $6 to $6.50 levels, said Paul Deane, agricultural commodity strategist at Australia and New Zealand Bank.
"Next year if corn is still at $6 then that's going to be still fairly attractive for the likes of China to potentially step in and buy aggressively again."
The US Grains Council has said China could still import some 8 million tonnes of corn at the current 95 percent self-sufficiency target and the volume could jump to as much as 16 million tonnes if Beijing cut the rate to 90 percent.
China, the world's second-largest corn consumer, last year returned to importing corn after years of blocking foreign grain, buying a record 1.57 million tonnes, up 18 times from the previous year.
Chicago soybeans rose 0.3 percent to $12.34 a bushel. Soy is down almost 15 percent for the month and off more than 5 percent for the September quarter, its second straight quarterly loss.
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