Wheat rallies 1% to linger near 2-month high on supply concerns

CANBERRA: US wheat futures rose more than 1% on Tuesday as global supply concerns pushed prices towards a two-month high after a US government report pegged the condition of crops below market expectations.

Corn rose 1% on concerns over hot and dry weather in the United States, while soybeans also climbed 1%.

The most-active wheat futures on the Chicago Board Of Trade were up 1.3% at $7.06-1/2 a bushel by 0504 GMT, having closed up 0.8% on Monday - when prices hit a May 18 high of $7.09-1/2 a bushel.

Analysts said the US Department of Agriculture's (USDA) latest crop report was driving gains as traders lowered global supply estimates.

"There remains the ongoing forecast crop reductions from Canada's Prairies and the US Northern Plains," said Tobin Gorey, director of agricultural strategy, Commonwealth Bank of Australia.

The USDA pegged the US spring wheat crop as 11% good to excellent, down from 16% a week earlier and slightly below analysts' expectations.

Additionally, 63% of spring wheat was rated "poor" or "very poor," up from 55% a week earlier.

Russia's 2021 wheat crop expectations dropped following hot and dry weather in southern Russia, while Ukrainian wheat export prices rose last week on harvest uncertainty in the Black Sea region.

The most-active soybean futures were up 1% to $13.86-1/6 a bushel, having closed down 1.4% on Monday.

The most-active corn futures were up 0.8% to $5.56-1/2, having closed little changed in the previous session.

Kazakhstan plans to limit exports of barley and wheat used for animal feeds and completely ban exports of rye for six months amid feed shortages caused by drought across Central Asia, a Kazakh government source told Reuters on Monday.

Farmers in south central Brazil have harvested 30% of their second corn crop through July 15, according to agribusiness consultancy AgRural on Monday.