Wheat rallies on US Plains dryness, technical buying

CHICAGO: US wheat futures surged nearly 3 percent on Tuesday on technical buying and crop production concerns due to dry weather in the U.S. Plains wheat belt and other major production areas around the globe.

Corn futures advanced on spillover support from wheat, while soybeans advanced on follow-through buying from Monday's strong gains.

Wheat recovered all of its prior-session losses that stemmed from rain in the U.S. Plains, where a large share of the milling wheat crop has suffered under a severe drought this year.

The U.S. Department of Agriculture said just 36 percent of the U.S. winter wheat crop was in good-to-excellent shape as of Sunday, compared with 52 percent at the same point last year.

"We got some rain, but the market is worried that maybe it's a little bit too late to have an impact at this point," said Ted Seifried, analyst with Zaner Ag Hedge.

Dry weather in parts of Canada, eastern Australia and southern Russia, all major wheat exporters, also gave prices a lift.

Chicago Board of Trade July soft red winter wheat was  up 14-1/4 cents, or 2.8 percent, at $5.21-1/2 a, while K.C. July hard red winter wheat was up 14 cents, or 2.7 percent, at $5.40-1/2 a bushel.

Both ended well above all key moving averages but closed below session highs.

Better-than-expected U.S. soybean planting progress capped the market after the USDA said 56 percent of the crop had been seeded as of Sunday, well ahead of the five-year average of 44 percent.

Corn planting was 81-percent completed, in line with the average pace, USDA said.

CBOT July soybeans were up 5-1/4 cents at $10.20-1/2 a bushel, settling near its 100-day moving average. The contract failed to breach chart resistance at its 50-day moving average.

CBOT July corn added 2 cents to $4.04-3/4 a bushel.