Wheat rises to seven-month high on low US crop ratings

CHICAGO: US wheat prices rose to roughly seven-month highs on Tuesday as low crop ratings and limited chances of rain in drought-hit parts of the Plains growing region kept attention on the risk of yield losses.

The gains were fueled by US Department of Agriculture data released late on Monday that rated the wheat crop in top growing state Kansas at only 12 percent in good to excellent condition, down 2 points from a month ago.

Wheat ratings also declined in Oklahoma, Montana, the Dakotas, Nebraska and Colorado.

"One important reason for the poor plant assessments is the drought that has over 70 percent of Kansas and the whole of Oklahoma in its grip," Commerzbank analysts said in a note.

K.C. March hard red winter wheat was nearly 2 percent or 9 cents higher at $4.86.3/4 per bushel as of $12.05 p.m. CDT (1805 GMT). Global benchmark Chicago Board of Trade March wheat was up 1 percent or 4-1/2 cents at $4.64. Both were the highest since late July.

Severe cold in Europe this week was also keeping attention on weather risks, although snow cover was expected to limit the impact of deep frosts in top wheat exporter Russia.

Soy prices were sharply higher, with soymeal futures reaching life-of-contract peaks as scant rainfall in Argentina continued to threaten harvest prospects in the No. 3 global producer after Brazil and the United States.

However, the impact on global supply could be curbed by Brazil's harvest which some forecasters expect to set a record volume.

Corn futures on the Chicago Board of Trade edged up to the highest since September, largely tracking gains in wheat and soy while worries of a smaller Argentine corn harvest pushed more export demand to US shippers.

CBOT March soybeans were up 7 cents to $10.41-1/4 per bushel and March soymeal up $9.40 or about 2.5 percent to $386.60 per ton.

CBOT corn futures were 1-1/4 cents higher at $3.69-3/4.

A meeting between President Donald Trump and senators representing the oil and corn industries failed to yield an agreement on how best to lower the cost of the United States' biofuels policy to refiners.

The lack of a resolution stoked optimism that the US corn ethanol policy could be safe from a major overhaul at least in the very near term.

"No deal made," said Republican Senator Charles Grassley of Iowa, a key participant in the talks representing corn growers.