Chicago | Reuters — U.S. wheat futures rose 1.2 per cent to a one-week high on Wednesday, extending four-day gains to nearly four per cent on short-covering and concerns about dry weather in U.S. growing regions.
Corn and soybeans also firmed, although renewed strength in the dollar capped rallies.
At the Chicago Board of Trade, May wheat settled up 5-3/4 cents at $4.99 per bushel (all figures US$). May corn ended up three cents at $3.91 a bushel and May soybeans settled up 8-1/4 cents at $9.92-3/4 a bushel.
CBOT wheat has rebounded since falling to a five-month low last week. Commodity funds hold a sizable net short position, leaving the wheat market open to bouts of short-covering.
Also, the U.S. winter crop is starting to emerge from dormancy amid dry conditions in the breadbasket of the Plains.
“It’s that time of year when the crop is at some risk, and you’ve got dryness in the Plains,” said Arlan Suderman, market analyst with Water Street Solutions. “But I don’t see any energy for sustaining a rally,” he added.
Corn firmed a day after the U.S. Department of Agriculture cut its forecasts of U.S. and world corn inventories below trade expectations.
U.S. farmers are also seen as likely to reduce 2015 seedings of corn to 88.5 million acres, a five-year low, according to a growers’ survey released by Allendale Inc.
Still, CBOT May corn stayed within the $3.75-$4 range in place since mid-January.
“Outside the curve”
Soybeans rose after Brazilian state crop agency Conab on Tuesday cut its forecast for the 2014-15 soybean crop to 93.3 million tonnes from 94.6 million last month.
Additional support stemmed from uncertainty about the movement of freshly harvested South American crops to ports, given recent protests by truckers and producers.
Argentine farmers halted crop sales on Wednesday, a farming group said, kicking off a three-day strike that is unlikely to affect exports because of sufficient reserves in storage.
Meanwhile, Brazilian government representatives and independent truckers discussed freight rates in Brasilia on Tuesday, their first formal meeting since drivers ended two weeks of roadblocks to protest rising costs.
“At this stage, the chance of another major trucker strike falls well outside the probability curve,” AgResource Co., a Chicago-based analytical firm, said in a note to clients.
— Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Michael Hogan in Hamburg and Colin Packham in Sydney.