US wheat futures rose for a fifth straight session on Thursday, hitting a 1-1/2-week high on short-covering and worries over potential yield losses due to poor weather in parts of the US crop belt, analysts said. Corn and soyabeans closed lower, with both commodities retreating from early gains on disappointing weekly US export sales data. However, a weaker dollar underpinned the market.
At the Chicago Board of Trade, May wheat settled up 8-1/4 cents at $5.07-1/4 per bushel. May corn ended down 2-1/2 cents at $3.88-1/2 a bushel and May soyabeans fell 2-1/4 cents at $9.90-1/2 a bushel. May wheat reached $5.13-1/2, the contract's highest level since March 2, after breaking through resistance at its 20-day average near $5.06.
The US winter wheat crop is emerging from dormancy amid dry conditions in the southern Plains wheat belt that could hurt yield potential if rains do not arrive in the coming weeks. The weekly US Drought Monitor classified about 70 percent of Oklahoma and 45 percent of Kansas as experiencing "moderate drought." Both states are major producers of hard red winter wheat, the largest US wheat class, which is used for making bread.
"The developing dryness in the US Plains could become an issue at some point. There is not a ton of rain in the forecast, and that is the heart of winter wheat country," said Joe Vaclavik, president of Standard Grain, a Chicago brokerage. At the same time, excessive moisture in the Mississippi River Delta and the Ohio River Valley has raised concern about the region's soft red winter wheat, used in snacks and pastries.
Commodity funds hold a hefty net short position in CBOT wheat, leaving the market open to short-covering. CBOT corn fell, retreating from early gains, after the US Department of Agriculture reported the smallest weekly 2014-15 export sales in two months. Similarly, weekly soyabean sales were the lowest since mid-January. "The export sales were a little disappointing. We don't look for big sales this time of year, but what we saw this morning was a disappointment to the trade," said Brian Hoops, president of US brokerage Midwest Market Solutions.
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