US wheat futures surged on Tuesday, led by a 5-percent spike in hard red winter wheat prices, after the US Department of Agriculture rated the US Plains crop in the worst shape in 16 years. Soyabeans and corn rebounded from the prior session's declines on spillover support from wheat and as cold, wet weather in the central United States stoked concerns about spring planting delays.
Both markets, however, continued to face headwinds from fears of a US trade war with China, a top buyer of agricultural products, after Beijing warned of counter-measures to further tariffs on Chinese goods. Technical buying fuelled the strong moves in hard red winter (HRW) and soft red winter (SRW) wheat, which broke through key chart resistance points on the rally. Further support stemmed from short covering by commodity funds that added short positions in SRW futures on Monday at the start of a new month and quarter.
The USDA late on Monday assessed only 32 percent of the US winter wheat crop in good to excellent condition as of Sunday, down from 51 percent this time last year. It was the lowest rating for this point in the crop year since 2002. Chicago Board of Trade May SRW wheat gained 14-1/4 cents, or 3.2 percent, to $4.60-1/2 a bushel by 12:20 pm CDT (1720 GMT), climbing above its 100-day moving average. May K.C. wheat was up 21 cents, or 4.5 percent, at $4.88-1/2 per bushel after rising above its 50- and 200-day moving averages.
A cold and wet weather pattern is expected to persist in the heart of the US corn belt through mid-April, stoking concerns that delayed planting could dent yield prospects. Acreage is already projected to be down from last year.
May soyabeans rose 8 cents to $10.43-1/2 a bushel, recovering nearly all of Monday's losses. May corn added 1-1/4 cents to $3.88-1/2 a bushel.
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