Wheat futures rise as dry weather threatens US production

CANBERRA: Chicago wheat futures rose for a second day on Tuesday, as an expanding drought in the US wheat belt threatened to reduce production, while the US dollar weakened.

However, gains were limited by the possibility of a diplomatic solution to the war in Iran, which lowered oil prices and raised hopes that disruption to global fuel and fertiliser supply could be eased.

Corn futures also rose, while soybeans were little changed.

The most-active wheat contract on the Chicago Board of Trade (CBOT) Wv1 was up 0.3% at $5.84-1/4 a bushel, as of 0437 GMT, while CBOT corn Cv1 rose 0.5% to $4.42-1/2 a bushel and soybeans Sv1 were flat at $11.62-1/2 a bushel.

Bendigo Bank Agribusiness analyst Rod Baker said wheat supply was likely to tighten due to dry US conditions and the high price of fuel and fertiliser.

“There’s a lot of wheat around, but prices will have to start coming up at some stage,” he said. Forecaster Commodity Weather Group said two-thirds of wheat in the US Plains were at risk of yield loss.

The US Department of Agriculture rated 34% of the winter wheat crop in “good or excellent” condition on Monday, down from 35% last week and below the average estimate from a survey of analysts.

Wheat futures were holding above their 50-day moving average, which provided technical support.

The US dollar slipped to its weakest since early March, making US commodities cheaper for buyers with other currencies, after the US said it continued to engage with Tehran to make a deal even as it blocked Iran’s ports.

Asian stocks rose, and oil retreated from highs above $100 a barrel.

Meanwhile, consultants APK-Inform and Argus trimmed their forecasts for Ukraine’s 2026 wheat harvest and the IKAR consultancy lowered its estimate for Russia’s wheat exports in April.