(Nasdaq) – U.S. wheat futures finished sharply higher on Wednesday as they benefited from concerns that unfavorable weather in the Black Sea area and Australia would hamper their wheat crops.
Corn and soybean futures also were higher.
Wheat futures climbed to the highest price for a front-month contract since Aug. 25 and held that level overall. The contracts saw support from reports that weather conditions are not optimal in the Ukraine and Australia, both large wheat producers. U.S. wheat prices have been hurt by ample global supplies and a strong dollar that makes the domestic grain less affordable for foreign buyers. But possible frost damage in Australia and dryness that is restricting planting in Ukraine could curtail some of those global supplies, potentially adding to demand for a U.S. crop, analysts said.
That spurred some fund managers that had bet wheat prices would fall to close those bets, which can support prices.
“It’s a global stage now. What goes on in the Southern Hemisphere does have an effect here,” said John Weyer, director of commercial hedging at Walsh Trading Inc., a Chicago-based commodity brokerage.
Wheat futures for December delivery on the Chicago Board of Trade closed 12 cents, or 2.4%, higher at $5.07 1/2 a bushel, slightly below the intraday session high.
Soybean futures also rose as investors unwound so-called “short” bets that prices would fall, analysts said. China is expected to announce on Thursday an agreement to purchase U.S. supplies of the oilseeds, which would bolster prices. That projected upward price pressure from the announcement is prodding some of the short sellers to close those bets, offsetting downward price pressure from the U.S. soybean harvest that recently began.
CBOT November soybeans were up 2 cents, or 0.2%, at $8.63 3/4 a bushel.
Corn futures were also higher, buoyed in part by reports that yields in some part of the country from the recently started harvest may be lower than expected. Some traders were betting the U.S. Department of Agriculture would lower its corn yield estimates in its October crop report, which would tend to lower supplies and support prices.
CBOT December corn rose 2 3/4 cents, or 0.7%, to $3.83 1/4 a bushel.
