Chicago Board of Trade wheat futures rebounded to near a four-month high on Wednesday on concerns about the fate of crops in several key regions, including the Black Sea, Australia and Argentina.
"The thought is that South America will be a big importer of U.S. wheat this year. South America's wheat crop is in bad shape compounded by acreage shifts to corn and soybeans," said Ted Seifried, an analyst for Zaner Ag Hedge.
He said Brazil is the world's third-largest wheat importer and they normally import most of their needs from Argentina, but crop and weather issues there may shift the business to the United States.
CBOT corn followed wheat higher and garnered additional support from short-covering, while soybeans gained on brisk export sales of the U.S. crop, including a sale on Wednesday of 120,000 tonnes to Russia.
Slow farmer selling of corn and soybeans despite active harvesting of each crop in the United States also contributed to the advances of corn and soybean futures.
Chicago Board of Trade December wheat closed a penny per bushel higher at $7.01-3/4, December corn was up 4-1/2 at $4.42-3/4 and November soybeans gained 7-3/4 to $13.10.
Technical traders cited chart resistance for the CBOT December wheat contract at its 200-day moving average of $7.12 per bushel. The session high was $7.10-1/2.
Traders said the wheat market, which has risen four out of the past five trading sessions, was getting significant attention as CBOT spot wheat futures have gained 4.7 per cent for the month.
"There is still concern that Argentina will not allow wheat exports in December and limit exports in January and February until the Agriculture Ministry has a better handle on harvested supplies," said Sterling Smith, a futures specialist for Citigroup.
The United States has been selling wheat to Brazil recently due to the lack of supplies in neighboring Argentina and very high prices in South America.
There was additional support for wheat on forecasts of dry weather in Australia, the world's second-largest exporter.
Australia is expected to experience hotter and drier weather than normal across much of the country over the next three months, the weather bureau said on Wednesday, potentially threatening agricultural production such as wheat.
"People are also saying frost damage to Australian wheat was pretty extensive," a trader said.
U.S. harvest progresses
Although corn futures held firm on Wednesday, gains were slowed by active harvesting of the U.S. crop and reports of bigger-than-expected yields.
"Corn, for the most part, is trying to follow soybeans and wheat," Seifried said.
The market is braced for a likely record-large corn harvest and a rebound in U.S. supplies from this season's 17-year low to an eight-year high next year.
The big demand for U.S. soybeans and slow farmer selling continues to buoy the soybean futures market.
"Soybeans have found strength from improving basis levels and strong export demand," Seifried said.
"With soybean harvest over 60 per cent complete it is thought that producer selling may slow in coming weeks. This seemingly has caused an influx of new export business as global end users look to fill their October-February needs," he said
However, U.S. farmers are harvesting what is likely to be the fourth-largest soy crop ever, a factor that is slowing price advances in the futures market.
"The November contract is now trading well above several significant moving averages, but we may see resistance at the 50-day average near $13.17," Smith said.
The bellwether November contract on Wednesday reached a peak of $13.18-3/4 per bushel before easing back.