Wheat Advances to Three-Week High as Rains May Damage U.S. Crop

June 3rd, 2013

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Category: Grains, Oilseeds

Weather affecting agriculture(Bloomberg) – Wheat advanced for a second day to trade at the highest level in almost three weeks as wet weather raised the risk of damage to the U.S. winter crop. Corn gained.

Wheat for delivery in July climbed as much as 0.9 percent to $7.115 a bushel on the Chicago Board of Trade, the highest price for the most-active contract since May 14. It traded at $7.1125 at 10:59 a.m. in Singapore on volume that was 85 percent above the 100-day average for that time of day.

Rains are expected over the U.S. plains and the Midwest later this week, after thunderstorms and showers hit the winter-wheat belt, Accuweather.com said in a report on May 31. Rain came too late for winter wheat in South Dakota and Nebraska, according to the government-backed U.S. Drought Monitor.

“Excessive moisture across the Midwest has raised concerns for disease-related yield losses for the SRW wheat crop,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia wrote in a report today, referring to soft-red winter wheat by its initials.

Export sales of the next U.S. wheat crop advanced for three straight weeks to May 23, taking the total to 5.56 million metric tons for delivery in the year from June 1, the U.S. Department of Agriculture said May 31. The sales were transacted before the USDA said on May 29 that it was investigating genetically modified wheat, which wasn’t approved for use, found in Oregon.

“The market remains wary of the potential fallout of the discovery of unapproved GM wheat in Oregon, slowing U.S. wheat export sales, and improving crop conditions in other parts of the world, including Australia,” Mathews said.

Corn for delivery in December gained as much as 0.7 percent to $5.7125 a bushel in Chicago and was at $5.71. Soybeans for July delivery rose 0.6 percent to $15.20 a bushel, extending a monthly advance.

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