Wheat firms for second day as dry weather hits U.S. spring crop

Forecasts of cooler weather next week for corn, soybeans

  

SINGAPORE/PARIS- Chicago wheat futures rose for a second straight session on Thursday, underpinned by a severe drought curbing yields of top quality U.S. spring wheat.

Corn and soybean futures edged higher.

"Dry weather is curbing U.S. spring wheat and that is supporting wheat prices globally including Australia where the market has climbed," one Sydney-based grains broker said.

The most-active wheat contract on the Chicago Board of Trade (CBOT) was up 1% at $6.96 a bushel, as of 1030 GMT, adding to Wednesday's 2.1% rally.

Corn gained 0.3% to $5.50-1/2 and soybeans Sv1 rose 0.6% to $13.68-3/4 a bushel.

Spring wheat yields across the northwest quarter of North Dakota are well below average this year as severe heat and long stretches of dry weather sapped crop potential, scouts on an annual tour of the country's top producing state said on Wednesday. 

The tour estimated the average yield at 24.6 bushels per acre (bpa) on the second day of the three-day Wheat Quality Council tour, down from 40.8 bpa in 2019 and the five-year average of 42.4 bpa. The tour was cancelled last year because of the coronavirus pandemic.

The drought extends into South Dakota and Montana as well as portions of Canada.

Concerns over global supply sent benchmark December BL2Z1 on the Paris-based Euronext milling wheat futures to a new two-month high.

Dry conditions affecting portions of the U.S. Midwest crop belt have lent support to corn and soybeans although forecasts for cooler temperatures next week and sluggish export demand for U.S. supplies are likely to keep a lid on prices.

In Brazil, freezing temperatures on Wednesday and Thursday will hit crops like corn and wheat, according to a warning issued to farmers by the government's food supply and statistics agency Conab. 

Commodity funds were net buyers of CBOT wheat, soybean, corn and soyoil futures contracts on Wednesday, and net sellers of soymeal futures, traders said.

(Reporting by Naveen Thukral; Editing by Subhranshu Sahu, Sherry Jacob-Phillips and Jane Merriman) ((naveen.thukral@thomsonreuters.com; +65-6870-3829; Reuters Messaging: naveen.thukral.thomsonreuters.com@reuters.net))


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