Wheat soars on US weather threats; export demand lifts soy

CHICAGO: US wheat futures surged about 4 percent on Monday, nearing a one-month high as cold weather threatened to stress US wheat already weakened by drought, traders said.

Soybean futures firmed on fresh export demand and easing concerns about a trade war with China, the world's biggest soy buyer. Corn followed the firm trend, with wintry weather in the Midwest adding to fears of potential planting delays.

As of 1:06 p.m. CDT (1806 GMT), Chicago Board of Trade May wheat was up 18-3/4 cents at $4.91 a bushel after reaching $4.93-3/4, its highest since March 13.

CBOT May soybeans were up 9 cents at $10.42-3/4 a bushel and May corn was up 2-1/4 cents at $3.90-3/4 a bushel.

Wheat posted the biggest gains after weekend temperatures dipped well below freezing across most of the US Plains hard red winter wheat belt.

"Temperatures were not quite cold enough across Texas to cause damage to the wheat crop, but some spotty damage was possible in western Oklahoma and portions of central and western Kansas," Radiant Solutions said in a daily weather note.

Ahead of the US Department of Agriculture's weekly crop progress report due later on Monday, analysts surveyed by Reuters on average expected the government to rate 31 percent of the US winter wheat crop as good to excellent, down from 32 percent the previous week.

"All the wheat (markets) are adding premium, anticipating a lower ratings number for this afternoon," said Jason Roose, analyst with Iowa-based US Commodities.

Soybeans got a boost from fresh export business, including confirmation from the USDA on Monday that private exporters sold another 232,500 tonnes of US soybeans to unknown destinations. The announcement followed similar sales confirmed by the government on Friday of 458,000 tonnes of soybeans.

"There are rumors and reports of exporters selling soybeans for September-October-Novovember, and that's got people feeling better," said Dan Basse, president of Chicago-based AgResource Co.

"And then we've got snow falling across Chicago, and we're all worried about the upcoming plantings," Basse added.

Analysts in the Reuters crop progress poll expected the USDA to show the US corn crop as 2 percent planted by Sunday, compared with 3 percent a year ago.

Soybean futures drew early support from comments by US government officials playing down the threat of a trade war with China, despite tit-for-tat tariff proposals in the past week.

But China stepped up its attacks on the Trump administration on Monday, saying Washington was to blame for the frictions and repeating it was impossible to negotiate under "current circumstances."

Traders were also awaiting Tuesday's monthly USDA supply/demand report that could bring revisions to projected South American corn and soybean output, along with adjustments to the US balance sheet.