US wheat prices rise

Wheat prices rose on Friday, extending the prior session's advance, with the rise driven partly by adverse crop weather in the United States. Corn and soybean prices were also higher with the market's focus already turning to a major report to be issued by the US Department of Agriculture next week.
Traders and analysts have cited mounting concern about crops in the US Plains hard red winter wheat region due to dryness, along with worries that excessive wet weather could hurt the spring wheat crop in the Northern Plains. Crop conditions were also a concern in France. "We have a pretty dry situation here in France," one dealer said.
CBOT May wheat rose 0.95 percent to $7.46-1/2 a bushel by 1147 GMT while May milling wheat in Paris climbed 2.7 percent to 236.00 euros a tonne. Dealers were also watching crop developments in the Black Sea region. Farmers in the leading grain-producing areas of Ukraine and Russia will start mass sowing in a few days and predict a rise in the 2011 grain harvest and a return to the lucrative export market.
But analysts and officials are now saying the increase may not be as large as predicted a few months ago. "I am not expecting a large recovery in Russia's wheat production this year because the winter wheat plantings were the lowest since 2007 and the winter wheat in Russia generally yields twice that of the spring wheat," FitzPatrick said.
HEALTHY EXPORTS Strong exports also helped to support prices. Weekly European Union data showed healthy wheat export volumes, albeit down on a two-month high the prior week. US weekly sales data showed China bought a total of 116,000 tonnes of wheat, most of which was hard red spring wheat.
The largest weekly purchase by China since July 2005 "has increased speculation that the impacts of a dry winter on the Chinese wheat crop could be larger than first expected," wrote Luke Mathews, commodity strategist at Commonwealth Bank of Australia, in a market note. CBOT May corn rose 1.25 percent to $7.11-1/4 a bushel while May soybeans were up 0.5 percent at $13.61 a bushel. Dealers said attention was turning to USDA data due to be issued on March 31.