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| 20 July, 2018

Grains-Wheat tops one-month high on technical buying, export hopes

European harvest troubles underpin wheat

Combines harvest wheat in a field near the village of Kruglolesskoye in Stavropol region, Russia June 26, 2018. Image used for illustrative purpose.

Combines harvest wheat in a field near the village of Kruglolesskoye in Stavropol region, Russia June 26, 2018. Image used for illustrative purpose.

REUTERS/Eduard Korniyenko

CHICAGO - U.S. wheat futures sailed to their highest prices in more than a month on Friday on technical buying and expectations for increased U.S. exports as poor crop weather hurts harvests in other countries.

Corn and soybean futures each advanced for the fifth straight day.

Traders focused on dry weather reducing harvest prospects in Europe and the Black Sea region, which is set to tighten global supplies of wheat.

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Consultancy Agritel forecast the French soft wheat crop, excluding durum, at 34.2 million tonnes, more than 6 percent below last year's crop. Countries like Germany and Ukraine are also expected to suffer losses from drought.

"You take major exporters of the world all having production issues at the same time, and it sets up well for our potential exports," said Ted Seifried, chief agriculture market strategist for broker Zaner Group in Chicago.

The Chicago Board of Trade's most active wheat contract traded to its highest price since June 13 before ending up 2.3 percent at $5.16 a bushel. It gained 3.8 percent on the week.

In Paris, European wheat futures set a one-year high as the worsening harvest outlook encouraged buying and pushed futures through chart resistance.

"A lot of this is technical but there's positive fundamental reasoning and rationale behind it," Seifried said about the U.S. rally.

CBOT corn futures extended a recovery from recent contract lows.

Soybeans have rebounded after touching a 10-year low on Monday on concerns over the U.S.-China trade row. Soybeans are the most valuable U.S. agricultural export to China, worth more than $12 billion last year, and face an extra duty from Beijing in retaliation for an initial round of U.S. tariffs.

The United States and China have slapped tariffs on $34 billion of each other's imports and U.S. President Donald Trump on Friday said he was ready to slap tariffs on all $500 billion of imported Chinese goods.

"Losses in soybeans are being limited by other buyers who have stepped into the U.S. market," said Karl Setzer, risk management team leader for MaxYield Cooperative. "The question with this is how long these buyers will remain in the market, as their needs do not equal those of China."

CBOT corn sailed 1.1 percent higher to $3.69 a bushel and touched its highest price since July 9. The contract ended up 4 percent on the week. Soybeans rose 0.3 percent to $8.64-3/4, closing up 3.7 percent on the week. (Additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore, Editing by Bernadette Baum and James Dalgleish)

© Reuters News 2018