LONDON: Chicago wheat futures rose sharply to a one-year high on Friday with the advance driven by diminishing outlooks for spring wheat crops in both the US and Canada.
Corn and soybeans showed more modest gains as the market awaited the release on Friday of USDA's acreage and quarterly stocks report.
The most active wheat futures contract on the CBOT was up 2.8 percent at $5.09-3/4 a bushel at 1046 GMT after peaking at a one-year high of $5.11-3/4.
Spring wheat on the Minneapolis Grain Exchange is up more than 30 percent this month, its biggest monthly rally since July 2010.
Drought conditions in the northern US Plains worsened in the past week and there are forecasts for more hot and dry weather that could crimp the harvest.
"US spring wheat futures have soared to a three-year high, as drought conditions in the northern plains increase the talk of greater crop abandonment and concerns build over the availability worldwide of quality and high protein wheat supplies," said David Sheppard, managing director at UK merchant Gleadell Agriculture in a market note.
The latest weekly US Drought Monitor, released on Thursday by a consortium of climatologists, showed "extreme drought" covering 25 percent of North Dakota, by far the top US spring wheat producer, up from about 8 percent a week ago.
"The market is cutting their high-protein wheat crop forecasts," said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.
"Many will be sceptical that US winter wheat prices should be this high and rising. We are approaching the heaviest point of the 2017 winter crop harvest and that is being added to comfortable supply."
The US Department of Agriculture was due to release updated planting figures on Friday. Analysts expect the USDA to lower its US spring wheat planting estimate to 11.2 million acres, from a March forecast of 11.3 million.
Canadian farmers have also planted slightly less wheat than expected, according to a Statistics Canada report issued on Thursday.
December milling wheat in Paris was up 1.0 percent at 180.25 euros a tonne.
Dealers said the strength of the euro has helped to cap gains in EU wheat prices despite a downgraded outlook for the French crop following a recent hot spell.
Chicago corn futures were also higher with the most active contract up 1.0 percent at $3.73-1/4 a bushel while soybean futures rose 0.4 percent to $9.19-1/4 a bushel.
Comments
Comments are closed.