US wheat futures surged 2.7 percent early on Wednesday, on track for their biggest gain since April 1, as the market bounced back from near five-year lows on disappointing results from an annual crop tour as well as a crumbling US dollar, traders said. The gains in wheat spilled into the corn market, which also benefited from slow farmer selling on the cash market. Soyabeans also were firm, but gains were kept in check by technical pressure after prices hit a two-month high.
Crop scouts on the first day of three-day tour of wheat fields in Kansas projected an average yield for hard red winter wheat in north Kansas of 34.3 bushels per acre, down from 34.7 bushels a year ago. "The first stages of the US crop tour (are) finding yields lower than average in some regions, which is a disappointment," said Frank Rijkers, agrifood economist at ABN Amro Bank.
The 2015 figure was the lowest for the tour's first day since 2001. The tour's previous five-year average for the same area is 42.5 bushels per acre. CBOT July wheat, the most actively traded contract, was up 12-1/2 cents at $4.79 a bushel at 10:50 am CDT (1550 GMT). K.C. hard red winter wheat for July delivery, which tracks the crop the scouts were surveying this week, was 13-1/4 cents higher at $5.03-1/2 a bushel. The dollar drop, stemming from a rise in European bond yields, made US wheat less expensive on the world market and provided cover for speculators to cash in short positions they have been holding in grains.
CBOT July corn was up 3-3/4 cents at $3.66-1/2 a bushel and CBOT July soyabeans were 1 cent higher at $9.85-3/4 a bushel. The US Environmental Protection Agency has sent blending targets for the country's renewable fuels program to the White House for review ahead of a June 1 deadline.
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