(Reuters) – Chicago wheat rose from near five-year lows on Wednesday, as a widely-watched U.S. crop tour initially found below-average yields. An export-boosting weakness in the dollar supported grains and the soy complex, with soybeans also rising on concerns that a strike in Argentina may disrupt soyoil and soymeal supplies.
Chicago Board of Trade July wheat rose 0.6 percent to $4.69-1/2 a bushel by 1014 GMT, having closed down 1.3 percent on Tuesday when prices hovered around their lowest level in five years.
July corn rose 0.3 percent to $3.64 a bushel and July soybeans rose 0.2 percent to $9.87 a bushel.
“Wheat is being supported today as the first stages of the U.S. crop tour is finding yields lower than average in some regions, which is a disappointment,” said Frank Rijkers, agrifood economist at ABN AMRO Bank.
“The weaker dollar will also make U.S. wheat more expensive in export markets, while a large investment fund short position is also hanging over the market.”
Crop scouts on the first day of three-day tour of Kansas estimated an average yield for hard red winter wheat in north Kansas of 34.3 bushels per acre, down from 34.7 bushels a year ago.
The 2015 figure was the lowest for the tour’s first day since 2001. The tour’s prior five-year average for the same area is 42.5 bushels per acre.
“Corn is being supported by some bargain-buying after prices touched seven-month lows on Tuesday, while there is also hope that new blending targets for renewable fuels will be agreed by the U.S. authorities,” Rijkers said.
The U.S. Environmental Protection Agency (EPA) has sent blending targets for the country’s renewable fuels program to the White House for review ahead of a June 1 deadline.
“Soybeans are being supported by concern the strike by Argentine crushing workers could reduce Argentina’s exports of soyoil and soymeal, compelling exporters to seek alternative supplies,” Rijkers added.
“This comes at a time when there are signs of strong export demand for U.S. soybeans, especially from China.” Argentine soyoil shipments were slowed on Tuesday by the start of a wage strike by a union representing 20 percent of the country’s crushing workers, while a powerful dock-workers union debated whether to join the work stoppage
