US wheat futures climbed to a two-week high on Wednesday as concerns about poor weather in the US Midwest, Western Europe and Canada prompted a round of fund-driven short-covering, traders said. Corn and soyabeans also advanced, rallying from early declines on unwanted rains in the Midwest that hurt yield prospects. At the Chicago Board of Trade at 12:31 pm CDT (1731 GMT), July wheat was up 6-3/4 cents at $5.28-1/4 a bushel after reaching $5.30, its highest since June 10.
CBOT July corn was up 2-1/2 cents at $3.70 a bushel and July soyabeans were up 2 cents at $9.89-1/2 a bushel. Storms were crossing parts of Iowa and central Illinois on Wednesday, and more were on the way. "Tomorrow is the wetter day... when the rains will increase across central Midwest, (producing) generally 1.5 inches or so," said Don Keeney, a meteorologist at MDA Weather Services. "It is not good news for the bean planting and wheat harvest," he added.
Including rain forecasts for the rest of the month, much of eastern Missouri, Illinois, Indiana and western Ohio will have received double their normal rainfall for June, MDA Weather Services said in a note to clients. Meanwhile, crops in Canada's Prairies are struggling with dry conditions. Dry weather is also stressing wheat in parts of the European Union, although analysts still expect a good crop there.
Large speculators hold a sizable net short position in CBOT wheat, leaving the market open to periodic short-covering, especially ahead of two key US government crop reports due on June 30, on US acreage and quarterly stocks. "The wheat market had the biggest concentration of speculative shorts. So whatever the excuse is, it's one, two, three, cover and get out," said Tom Fritz, a partner at EFG Group in Chicago.
Comments
Comments are closed.