Wheat rises on US drought, soybeans near seven-week high

SINGAPORE: Chicago wheat futures rose for a third straight session on Tuesday, supported by crop damage from a severe drought in the US Plains, although forecasts of some rainfall eased concerns.

Soybeans ticked higher, trading near their highest level since mid-March reached on Monday, as firm crude oil prices and strong demand underpinned prices.

“We have the dry weather hitting US wheat crop and renewed tensions in the Middle East, which are going to drive prices of grains and oilseeds higher,” said one trader in Singapore.

The most-active wheat contract on the Chicago Board of Trade (CBOT) rose 0.8% to $6.44-1/4 a bushel by 0327 GMT. Last week, the market climbed to its highest in two years.

Soybeans added 0.1% to $12.23-1/2 a bushel, while corn was flat at $4.85-3/4 a bushel.

Forecasts of rains in the parched US wheat belt limited the upside in prices, though showers may come too late for areas where the drought has already done irreversible damage to the winter crop, traders said.

The US Department of Agriculture reported 31% of the nation’s winter wheat crop was in good to excellent condition in a weekly report, up from 30% last week but still the lowest for this point in the year since 2023 as the crop struggles with the drought.

Oil prices eased after climbing by as much as 6% in the previous session on signs the US Navy is loosening Iran’s closure of the key Strait of Hormuz waterway, potentially opening up supply from the key Middle East producing area.

Some farmers in the central and eastern US grain belt have yet to begin planting corn and soybeans due to wet, cold conditions.

In news, Brazil’s soybean production is expected to reach 181.6 million metric tons in 2025/26, consultancy firm StoneX said on Monday, raising its outlook by around 1% from an April projection.