SINGAPORE: Chicago wheat rose more than 1% on Monday to its highest in almost three weeks as concerns over Black Sea supplies and crop damage in top consumer China underpinned the market.
Corn jumped to a six-week high while soybeans gained for a fourth consecutive session with dryness in key growing US Midwest supported prices.
“The wheat market’s deeply oversold condition has left it vulnerable to heavy short covering when the weather, economic strength, or uncertainty about global crops emerge,” commodities research firm Hightower said in a report.
Russia limiting ship registrations for Black Sea cargoes and excessive rains in China’s largest wheat producer Henan are supporting prices, it added.
The most-active wheat contract on the Chicago Board of Trade (CBOT) added 1.2% to $6.26-1/2 a bushel, as of 0302 GMT, after climbing earlier in the session to its highest since May 17 at $6.28 a bushel.
Corn rose 0.7% to $6.13-1/2 a bushel, having risen to its highest since April 24 at $6.14 a bushel and soybeans gained 0.6% at $13.60-1/2 a bushel.
Kyiv said on Thursday the UN-brokered Black Sea grain export deal had been halted again as Russia had blocked the registration of ships to all Ukrainian ports.
US wheat dips as worries ease over China rain-damaged crop
However, Ukraine would be ready to continue exporting grain across the Black Sea as part of a “plan B” without Russian backing if Moscow pulls the plug on the current grain export deal and it collapses, Ukraine’s farm minister said on Friday.
In China, the largest wheat-growing province of Henan is expected to be hit by more rain in coming days, state forecasters said on Thursday, complicating efforts to harvest grain already damaged by wetter than normal weather in late May.
China is the world’s biggest wheat consumer. The condition of French soft wheat declined in the week ended May 29, data from farm office FranceAgriMer showed on Friday, suggesting a dry spell was starting to affect some crops.
An estimated 91% of soft wheat was rated as being in “good-or-excellent” condition, down from 93% the previous week.
Forecasts of dry weather for newly planted corn and soybean crops in the US Midwest supported prices.
Bullish April crushing data lent additional support to soybean futures.
The US Department of Agriculture on Thursday said US processors crushed 187 million bushels of soybeans in April, topping a range of analyst estimates.
Large speculators trimmed their net short position in CBOT corn futures in the week ended May 30, regulatory data released on Friday showed.
The Commodity Futures Trading Commission’s weekly commitments of traders report also showed that non-commercial traders, a category that includes hedge funds, increased their net short position in CBOT wheat and increased their net short position in soybeans.
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