CHICAGO: US wheat futures surged 2.8% to a three-week high on Wednesday, with traders focused on dry and cold weather in key growing areas of the Midwest and southern Plains.
Weather concerns also boosted soybeans and corn as investors shrugged off recent rains in key growing areas of South America.
“Traders realize that, while this week’s rains are good in South America, a lot of risk remains for the rest of the growing season in Argentina, with the February models and analogs leaning dry,” Arlan Suderman, chief commodities economist at brokerage StoneX, said in a note to clients. Corn futures were on track for their third day of gains and hit their highest since Dec. 28.
Wheat notched the biggest gains, with the most-active Chicago Board of Trade March soft red winter wheat contract rising 21-1/2 cents to $7.90-1/2 a bushel by 11:25 a.m. CST (1725 GMT). The contract hit its highest since Dec. 29.
“A cold snap is currently underway in the U.S., raising concerns about winter wheat crops weakened by this fall’s water deficit,” French consultancy Agritel said.
CBOT March corn was up 13 cents at $6.12-1/2 a bushel. A build-up of Russian troops along the country’s border with Ukraine also lent support.
“Tensions between Russia and Ukraine have reached a new high, with U.S. and European officials speaking as if a military conflict is imminent, which could shut down corn and wheat exports from the region, further tightening world supplies,” Suderman added.
Strong global demand for wheat underpinned the market, highlighted by fresh activity on the export market. State grain buyers in both Jordan and Iran on Wednesday issued tenders to purchase wheat.
Soybeans snapped back from three straight losing sessions. CBOT March soybeans were up 24-1/4 cents at $13.85-1/2 a bushel.