(Reuters) – U.S. wheat rose on Monday to trade near its highest since June, underpinned by renewed concerns over supplies from South America and the Black Sea region.
Soybeans edged higher after sliding to a 20-month low earlier in the session, while corn hovered close to its lowest since August 2010 on pressure from reports of better-than-expected yields from the rapidly advancing U.S. harvest.
“You have ongoing discussion about the impact of wet weather on Black Sea planting and now there is talk around what Argentina will do because of lower production,” said Brett Cooper, senior markets manager at INTL FCStone Australia.
“There are a number of areas around the world where private estimates of wheat production are lower than the USDA.”
Chicago Board of Trade front-month wheat rose 0.4 percent to $6.95-1/4 a bushel by 0250 GMT, not far from last week’s three-and-half month high of $6.99-3/4 a bushel.
The price of Argentine wheat has soared on the local market as millers in the South American country scramble for scarce supplies ahead of the 2013/14 harvest, which follows a thin 2012/13 crop. Argentine millers looking for wheat ahead of the new harvest, set to begin in November, have been paying $500 or more per tonne for immediate delivery, about double the price quoted on the Chicago Board of Trade, traders said.
The rally in Argentina’s wheat market comes after crop damage in Brazil and China earlier this year and concerns about supplies from the Black Sea region. Unfavourable conditions for harvesting in the Siberia region has prompted two leading agricultural analysts to cut their forecasts for Russia’s 2013 grain crop.
Harvesting in Russia, one of the world’s major wheat exporters, is not completed yet as crops in Siberia were delayed by a late spring and then by rain during the third quarter.
Soybean and corn futures are being weighed down by seasonal pressure from the U.S. harvest.
CBOT spot-month soybeans rose 0.5 percent to $12.73-1/2 a bushel after dropping to the lowest since February, 2012 earlier in the session. December corn gained 0.2 percent to $4.34 a bushel but not far from last week’s three-year low.
The U.S. Agriculture Department (USDA) did not provide an update on harvest progress this week due to the partial shutdown of the federal government. Analysts estimated that harvest was 50 percent complete as of Oct. 6 and farmers in most areas have had good weather for harvesting since then.
Last week, the market traded without insight from a key crop report that was not released due to the government shutdown, the first time in 40 years the monthly update was not issued.
Traders typically rely on the USDA report, which covers everything from the size of the U.S. corn harvest to China’s soybean imports, to help forecast market direction.
