Wheat rises 1.5pc on dry weather concern, soybeans firm

SINGAPORE/PARIS: Chicago wheat futures rose around 1.5pc on Tuesday, moving back above $6 a bushel underpinned by worries that dry weather in key US and the Black Sea region producing areas could threaten 2021 supplies.

Soybeans rebounded from a 3pc drop in the previous session, as expectations of lower global supplies supported prices.

"Weather forecasters continue to expect no change to soil moisture for large portions of Black Sea and US Hard Red Winter (wheat) crops," said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.

"That weather context continues as an important source of support for wheat."

The most-active wheat contract on the Chicago Board of Trade was up 1.5pc at $6.03-1/4 a bushel by 1040 GMT.

In Europe, benchmark December on Paris-based milling wheat futures hit a contract high at 203.25 euros ($239.60) per tonne, up 1.2pc.

Soybeans were up 0.5pc at $10.38-3/4 a bushel and corn added 0.5pc to $3.90-3/4 bushel.

Russian wheat export prices rose last week due to high demand from exporters, and limited supply from farmers concerned about dry weather in several regions which signals risks for the 2021 crop, analysts said on Monday.

Ukrainian consultancy APK-Inform on Tuesday cut its forecast for Ukraine's 2020/21 grain harvest and exports due to poor weather.

In France, the European Union's top largest grain producer, the farm ministry cut nearly all its grain and oilseed crop estimates for this season's crops.

US corn and soybean supplies will be smaller than forecast, as adverse weather has reduced the acreage that farmers will harvest, the government said last week.

Commodity funds were net buyers of CBOT wheat futures contracts on Monday and net sellers of soybeans, corn, soymeal and soyoil futures contracts, traders said.