Chicago | Reuters – Chicago Board of Trade (CBOT) wheat futures rose on Thursday, with the front contract rising above $7 a bushel for the first time in a week after findings from an annual U.S. crop tour showed the impact of drought in the northern Plains spring wheat belt.
Corn and soybean futures closed higher on fears that the drought also may curb corn and soy prospects.
CBOT September wheat settled up 16-1/2 cents at $7.05-1/4 per bushel after reaching $7.06-3/4, the contract’s highest since July 22. Minneapolis Grain Exchange September spring wheat ended up 14-3/4 cents at $9.18-1/2.
CBOT December corn closed 7-1/2 cents higher at $5.56-1/2 a bushel and November soybeans rose 16-3/4 cents to settle at $13.77-3/4 a bushel.
Wheat set the tone as scouts on the second day of the Wheat Quality Council’s annual tour found that spring wheat yield prospects in northwest North Dakota were well below average.
After the CBOT close on Thursday, the tour released its final yield projection for North Dakota, the top U.S. spring wheat producer, pegging the state’s yield at 29.1 bushels per acre, far short of the tour’s average from 2015-2019 of 43.6 and the lowest on record going back to 1993.
“It’s certainly been dry here for a long time, particularly in the hardest-hit areas in the north of the state,” said Dave Green, executive vice president of the Wheat Quality Council.
Corn and soybean futures followed the firm trend, given that the drought stretches into key Midwest states such as Minnesota and Iowa.
“Traders worry that will translate into notable corn and soybean losses in the western (Corn) Belt as well,” Arlan Suderman, StoneX chief commodities economist, wrote in a client note.
Globally, the International Grains Council cut its 2021/22 world wheat crop outlook by 1 million tonnes, to 788 million, with the diminished outlook for North America partially offset by improved prospects in the European Union. The IGC raised its forecast for world 2021/22 corn (maize) production by 1 million tonnes, to 1.202 billion tonnes.
Worries about freezing temperatures hurting Brazil’s second-crop corn lent support, fueling expectations that some export business could shift to the United States.
A weaker dollar was supportive, theoretically making U.S. grain more competitive on the export market. The Federal Reserve’s message earlier this week that it was in no hurry to taper stimulus pinned the dollar at a one-month low.
– Additional reporting by Naveen Thukral in Singapore and Sybille de La Hamaide in Paris.