Chicago | Reuters — Chicago wheat futures climbed to two-week highs on Tuesday as a surprise decline in winter wheat condition ratings raised concerns about supplies of the food grain, traders said, while corn futures ticked lower ahead of Thursday’s U.S. Thanksgiving holiday.
Chicago Board of Trade March wheat futures settled up 13 cents at $6.17-1/2 per bushel after reaching $6.18-1/2, the contract’s highest level since Nov. 11 (all figures US$).
CBOT March corn ended down 3/4 cent at $4.32-1/2 a bushel. January soybeans settled down 1/4 cent at $11.91-1/4 a bushel, one day after climbing to $12, the highest price for a most-active soybean contract since June 2016.
Wheat turned up after early declines, supported in part by a weaker dollar, which tends to make U.S. grains more competitive on the world market.
“The dollar is down, and of course the conditions ratings being down were a little bit of a surprise,” said Terry Linn, analyst with Linn and Associates in Chicago.
The U.S. Department of Agriculture late on Monday rated 43 per cent of the U.S. winter wheat crop in good to excellent condition, down from 46 per cent a week earlier and bucking analyst expectations for a one-point improvement.
The biggest declines occurred in drought-hit states in the southern Plains.
Wheat drew additional support from traders exiting long corn/short wheat spread positions ahead of the holiday weekend. The CBOT will be open for a shortened session on Friday after Thursday’s holiday, but trade tends to be thin that day.
“Beans and corn are at or near new highs for their move, so it’s not unexpected to see the market get some liquidation around this time,” Linn said.
Traders were also squaring positions ahead of the first notice day for deliveries against CBOT December futures contracts, scheduled for Monday (Nov. 30).
“It’s just fairly light in terms of news, and traders are starting to enter the holiday trade,” said Terry Reilly, analyst with Futures International in Chicago.
— Reporting for Reuters by Julie Ingwersen in Chicago; additional reporting by Gus Trompiz in Paris and Colin Packham in Sydney.