GRAINS-Wheat Firm on Europe Heatwave; Corn, Soy Rise After More U.S. Rain

June 25th, 2019


Category: Grains

(CNBC) – U.S. wheat futures turned higher on Monday, tracking strength in Paris prices as a heatwave taking hold in western Europe raised the risk of yield losses and tempered recent expectations of bumper global supplies. The scorching temperatures expected this week in Europe follow a hot, dry spell in Russia and Ukraine, and concern over crop damage countered seasonal supply pressure on prices as harvests get going across the northern hemisphere.

Chicago corn and soybean prices rose as weekend rain in the U.S. Midwest kept the focus on waterlogged conditions that have disrupted planting and put a question mark over this year’s harvest. Grain markets are awaiting weekly U.S. Department of Agriculture crop progress data later on Monday and revised USDA acreage estimates on Friday to gauge the impact of torrential rain in U.S. grain belts this spring. The Chicago Board of Trade most-active wheat contract was up 0.4% at $5.33 a bushel, as of 1201 GMT, while front-month wheat on Paris-based Euronext was up 1.0% at 182.50 euros a tonne.

The CBOT benchmark recovered from an earlier fall after Euronext opened higher, with the Paris contract reaching a one-week high at 183 euros. The intense heat in western Europe, which will see temperatures approach 40 degrees Celsius (104oF) in Paris in the middle of the week, could curb a recent trend of rising cereal harvest forecasts. “The heat will be detrimental for crops in reproductive development looking to rebound from last season’s crippling drought,” Refinitiv Agriculture Research analysts said, noting temperatures would be over 10 degrees above normal. A hot, dry spell in parts of Russia and Ukraine was also being monitored by wheat traders, although temperatures were expected to moderate this week while the arrival of first harvest supplies was also capping prices. CBOT corn added 0.7% to $4.45-1/2 a bushel, while soybeans gained 0.8% to $9.09-1/2 a bushel.

Corn and soybeans eased on Friday as weather forecasts pointed to warmer conditions in the week ahead. But widespread rain over the weekend may have kept some fields waterlogged, and some light showers are forecast this week. “The U.S. Midwest is mostly wet to very wet,” said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia. “The wet conditions now have less impact on planting because that window has closed for most growers. From here the impact is on crop development and yield.”

Add New Comment

Forgot password? or Register

You are commenting as a guest.