US wheat futures rose 1.9 percent on Thursday, notching their strongest weekly gain in nearly five months, as poor weather threatened crops in North America and Europe and as the dollar fell to its lowest point in nearly three years. Corn rebounded from the prior session's 2 percent slide as wet weather stalled early planting in the US Midwest, but closed below early highs amid uncertainty over forecasts calling for drier weather in May.
Soyabeans added 1.7 percent as traders unwound corn/soyabean spreads they had entered on ideas that the slow start to corn planting would siphon more acres into soya cultivation. Stronger than expected weekly export sales data and a weak dollar added support. "We're bouncing back on the weather. Despite forecasts for better conditions by the middle of May, the weather looks to be pretty bad through then. And a lower dollar certainly isn't hurting anything either," said Jack Scoville, analyst with The Price Futures Group.
The US dollar on Thursday fell to a near-three-year low against a basket of currencies as investors fretted over low interest rates and the threat of a US credit rating downgrade. Dollar-denominated commodities such as grains tend to rise when the greenback sinks, partly because it increases the buying power of those holding other currencies. Corn prices dropped to their lowest levels in nearly three weeks on Wednesday as investors exited long positions on forecasts for drier weather over the US corn belt eased some concerns about delayed spring planting. Updated forecasts for weekend rains in some areas renewed worries about a late start to seeding at a time when corn stocks are projected to be the tightest since the 1930s.
But some investors sought to unwind their corn/soyabean spreads ahead of the three-day weekend, with markets closed on Friday for the Good Friday holiday, leading to choppy trade. Soyabeans climbed to near-two-week highs and posted their strongest weekly gains in four months, helped by US Department of Agriculture data showing heavier than anticipated export sales last week.
"There were solid export sales, better than expected in spite of all of the cancellation talk. I also think some of them were short beans and didn't want to stay that way going into the weekend," said Dan Dempsey, an analyst for Iowa Gain. Chicago Board of Trade corn for May added 4-1/2 cents, or 0.6 percent, to $7.37-1/4 a bushel, rebounding from two days of declines. But the market fell for a second consecutive week, shedding 0.6 percent from a week ago. May soyabeans rose 1.7 percent to $13.80-1/2 a bushel, the largest percentage gain in two weeks. Soyabeans gained 3.7 percent in the week, the strongest weekly performance this year.
WEATHER LIFTS WHEAT CBOT soft red winter wheat futures for May added 14-1/2 cents, or 1.9 percent, to $7.99-1/2 a bushel. The contract rose 7.4 percent this week, the most since early December. Wheat's advance was led by gains in higher-protein wheat varieties traded on the Kansas City Board of Trade and the Minneapolis Grain Exchange which have been threatened by adverse weather.
Prolonged drought conditions through Texas, Oklahoma and southern areas of Kansas, the top US winter wheat growing state, have left wheat industry experts fearing there is little hope for much of the new wheat crop due to be harvested this summer. Meanwhile, soggy conditions have delayed the start of spring wheat seeding in the northern US Plains. KCBT May hard red winter wheat rose 12-1/2 cents, or 1.4 percent, to $9.32-1/2 a bushel, while MGE May spring wheat climbed 12-3/4 cents, or 1.4 percent, to $9.51-1/2.