(Reuters) – Chicago wheat rose on Friday and the market was on track for its biggest weekly gain since November as adverse weather across the U.S. grain belt prompted concern over a potential decline in yields.
Soybeans were little changed after closing marginally lower as the market remained under pressure from rising Brazilian supplies and falling U.S. exports.
Chicago Board of Trade wheat has risen 5.4 percent this week, its biggest gain since mid-November, while soybeans have risen marginally after suffering a 4.5 percent loss last week.
On Friday, wheat was trading 0.1 percent higher at $5.07-3/4 a bushel at 0318 GMT while soybeans slipped 0.2 percent to $9.88-1/2 a bushel.
“U.S. hard red winter crops need precipitation but there’s really not that much on the horizon,” said Tobin Gorey, an agricultural commodities strategist at Commonwealth Bank of Australia.
“Some hard red winter crop areas are likely to see temperatures high enough for wheat to start growing without sufficient moisture.”
The U.S. winter wheat crop is emerging from dormancy amid dry conditions in the southern plains that could hurt yields if rain does not arrive in the coming weeks.
The weekly U.S. Drought Monitor classified about 70 percent of Oklahoma and 45 percent of Kansas as in “moderate drought”. Both states are major producers of hard red winter wheat, the largest U.S. wheat class, which is used for bread.
At the same time, excessive moisture in the Mississippi River Delta and the Ohio River Valley has raised concern about the region’s soft red winter wheat, used in snacks and pastries.
Commodity funds hold a hefty net short position in CBOT wheat, leaving the market open to short-covering.
Soybeans are being weighed down as Brazil takes away a share of the world export business. Weekly U.S. soybean sales were the lowest since mid-January, the Department of Agriculture reported.
Brazil’s soybean exports will probably rise to more than 7 million tonnes in March with little risk of further disruption from truck strikes, analyst Pedro Dejnaka, managing partner of AGR Brasil, told the Thomson Reuters Global Ags Forum.
The market’s attention is also turning to next year’s planting, which is likely to provide price direction. A senior farm economist said U.S. grain farmers are planning to plant more soybeans this year, at the expense of corn acreage.
