Plains forecast extends US wheat rally; soy rises on export strength

CHICAGO: US wheat futures rose for the sixth day in a row on Thursday, with new forecasts calling for extended dryness in the U.S. Plains pushing prices to fresh 7-1/2-month highs, traders said.

Soybean futures firmed to a 13-month high on signs of strong export data. Parched soils in Argentina that threatened to reduce crop yields in that key South American supplier continued to underpin prices.

Corn futures edged higher on the back of the gains in soybeans and wheat, but strength was kept in check by technical resistance.

Wheat, which has risen 12.7 percent during its current winning streak, notched the biggest gains as conditions in the Plains have worsened.

"The forecast for the next three weeks shows more of the same, with moisture receipts expected to remain well below normal for these areas," Don Keeney, senior agricultural meteorologist for Radiant Solutions, said in a note to clients. "Wheat will be emerging from dormancy over the next few weeks, and the very dry soils will allow crop conditions to deteriorate further."

At 9:52 a.m. CST (1552 GMT), Chicago Board of Trade May soft red winter wheat was up 9-1/4 cents at $5.04-1/4 a bushel. The most-active contract topped out at $5.04-1/2 a bushel, its highest since July 21.

K.C. hard red winter wheat futures, which track the crop being grown in the Plains, were up 2.1 percent and hit their highest since July 13.

"The crops will soon ... attempt to start growing again, but fail, in dry soils," said Tobin Gorey, director of agricultural strategy, Commonwealth Bank of Australia.

CBOT May soybean futures were 3 cents higher at $10.58-1/2 a bushel. The most-active soybean contract hit its highest since Feb. 10, 2017.

The U.S. Agriculture Department on Thursday morning reported weekly soybean export sales of 979,900 tonnes, which topped forecasts for 400,000 tonnes to 800,000 tonnes.

USDA also announced snap soybean sales on Thursday that totaled 246,000 tonnes, including 120,000 tonnes for delivery to China during the current marketing year.

CBOT May corn futures were 1/4 cent higher at $3.82-1/4 a bushel. Prices hit resistance near the 6-1/2-month high hit on Wednesday.