Wheat Prices Hit 10-month High on Weather Worries

(Agriculture.com) – U.S. wheat futures rose on Tuesday to hit their
highest in more than 10 months, with traders worried that adverse weather across
several key global growing regions could reduce crops.
Soybeans rose on hopes China is resuming buying U.S. soybeans again after
the trade dispute disrupted purchases. Corn was up, drawing support from wheat.
Chicago Board of Trade most active wheat was up 1.2 percent at
$5.49-3/4 a bushel at 1148 GMT. It earlier touched its highest since July 2017
at $5.54 a bushel, after closing up over 2 percent on Friday.
U.S. markets were closed for a public holiday on Monday.
Most active soybeans rose 0.2 percent at $10.44-1/4 a bushel. Most
active corn rose 0.4 percent to $4.07-1/2 a bushel.
“Wheat is again being supported by worry about dryness in world production
regions with most focus today on the Black Sea,” said Matt Ammermann, commodity
risk manager with INTL FCStone. “There is also worry about dryness in the United
States, Australia and Canada.”
“We see a lack of rain in Russia with a debate about if this will reduce the
crop, although it is still rather early for detailed estimates.”
“It cannot be termed a drought but the market is starting to get worried
that a stress point has been reached in Russia. There is also concern about hot
and dry weather in the U.S. Plains although I think most of the dryness issue in
the U.S. is now passed.”
Soybeans have drawn support in recent days amid a thawing of relations
between the United State and China, stirring expectations of increased demand
from Beijing.
China has given the green light to state-owned companies to begin buying
U.S. soybeans again.
The outcome of the U.S./China trade war is still not fully clear, Ammermann
said.
“The market likes the signs China is again buying U.S. soybeans,” Ammermann
added. “However, China is also expected to buy Brazilian soybeans in the near
future.”
Analysts also noted that potential transport problems in Brazil could
support soybeans.
Brazil’s president on Sunday made concessions in a bid to end a truck strike
that has severely hampered the flow of food, fuel and key exports in Latin
America’s largest economy.
“Corn is seeing spillover support from wheat but corn is also entering the
traditional weather market as the U.S. crop develops,” Ammermann said. “The
market is expected to react to any indications of unfavourable crop weather in
U.S. corn belts.”
Grains prices at 1148 GMT

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Contract Last Change Pct chg Two-day chg MA 30 RSI
CBOT wheat 550.00 7.00 +1.29% +3.72% 507.78 75
CBOT corn 407.25 1.25 +0.31% +0.74% 399.56 65
CBOT soy 1043.50 2.00 +0.19% +0.75% 1031.78 66
CBOT rice $11.56 -$0.01 -0.09% -0.04% $12.71 18
WTI crude $66.90 -$0.98 -1.44% -5.39% $69.52 22
Currencies
Euro/dlr $1.154

Most active contracts
Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight

RSI 14, exponential