US wheat futures gained 3.1 percent in European and Asian trade on Wednesday, rising for the fifth straight session on concerns that adverse weather in the United States and Australia will hurt crops. "This rise is being driven by potential weather-related supply disruptions, which are likely to affect harvests in Australia and the US," one European futures trader said.
Chicago Board of Trade wheat for December delivery rose 3.1 percent to $6.71 per bushel by 1200 GMT. Crop ratings for the US winter wheat crop are at the lowest level in three years due to a lack of rain in key growing areas in the Plains. In Australia, harvesting of the 2010/11 wheat crop has been disrupted by heavy rain Australia and concerns are growing that part of the harvest will be downgraded to feed quality.
"Eastern Australia is experiencing heavy rains which are expected to worsen, increasing the likelihood that the world's fourth largest exporter will miss output targets," the European trader said. "Concurrently, dry weather in the US Plains means there are concerns about dry weather."
Wet Australian weather and higher yields mean higher protein wheat is likely to be scarce, adding to a global shortage following weather related setbacks in countries including Canada and Germany. Adam Davis, senior grain trader at Merricks Capital in Melbourne, said: "The two-week forecast is showing a lot more rain than it was a couple of days ago so it does not look good." European wheat markets followed the stronger trend. Paris January wheat was up 3 euros or 1.3 percent at 1200 GMT. The European market was awaiting the outcome of a new purchase tender on Wednesday from key wheat importer Egypt.
"A key factor will be whethe the recent fall in the euro will help overall EU wheat bids," one trader said. "US wheat is still looking cheap." US wheat won all the business in Egypt's previous tender on November 18. Corn and soyabeans futures also rose as the dollar eased after strong gains this week.
The euro rose on Wednesday as a three-day selling spree lost steam, but doubts about whether the euro zone can contain debt problems facing some states kept the single currency in range of a 2 1/2-month low versus the dollar. "The dollar is a little weaker while some comments last night from China were supportive for soyabeans," said Davis.
A Chinese official said the country expected to continue to boost imports of soyabeans next year but not so much corn. "I'm surprised corn is higher but it was off last night so there's probably a rebound there," said Davis. CBOT corn for December delivery added 1.3 percent to $5.37-1/4 per bushel by 1200 GMT while January soyabeans gained 1.3 percent to $12.59-1/4 a bushel.
Corn futures declined about 9 percent in November, in the first monthly fall since June, as funds speculative funds cut long positions. Soyabean futures climbed 1.6 percent in November, in the third straight month of gains, buoyed by continued strong export demand.