Spring wheat set for biggest 2-day rally in 2 years on crop-damage fears
SINGAPORE: US spring wheat futures rose 2.2 percent on Wednesday, with the market poised for its biggest two-day rally in as many years on concerns over dry weather hitting yields in the United States and Canada.
Spring wheat traded on the Minneapolis Grain Exchange has risen almost 7 percent since Tuesday, the biggest two-day rise since June 2015.
Gains in high-protein spring wheat pushed Chicago wheat , corn and soybeans higher.
"North American spring wheat remains the epicentre of the action," said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia in Sydney.
"Rainfall, recent and expected soon, is only enough to be a balm rather than a cure."
The US Department of Agriculture assessed the spring wheat crop at 45 percent good-to-excellent as of June 4, down 10 percentage points from a week earlier. Analysts had been expecting a good-to-excellent rating of 53 percent.
High-protein wheat prices being offered from Australia and the United States into Asia are climbing as the dry weather threatens to reduce the US harvest, traders said on Tuesday.
Australian prices, some of the most competitive in recent months, have also been supported by farmers holding back supplies.
Still, Australia slightly raised its forecast for 2017/18 wheat production on Wednesday as favourable weather along the country's east coast looks set to boost output from the world's No. 4 exporter.
Australian wheat production is expected to total 24.19 million tonnes, the Australian Bureau of Agriculture, Resource Economics and Rural Sciences (ABARES) said, up nearly 1 percent from its March forecast of 23.98 million tonnes.
The USDA rated soybean crop as 66 percent good-to-excellent, compared with forecasts for 69 percent. US corn was at 67 percent good-to-excellent, matching analyst forecasts.
The National Oilseed Processors Association's May soybean crush was forecast to fall 6 percent below the 2016 level, with US processors slowing their pace amid abundant South American supplies.
Analysts were expecting a May crush of 143.192 million bushels, according to the average of six estimates given in a Reuters poll. A year ago, NOPA reported a May crush of 152.280 million bushels.