US wheat futures rallied 2.9 percent to their highest level in more than four months on Tuesday, supported by concerns that political unrest in Ukraine will disrupt exports and worries about dry soils limiting US production, traders said. Some technical buying - the benchmark Chicago Board of Trade May contract broke above its 200-day moving average for the first time since February 2013 - also contributed to the strength in wheat.
"It was kind of a contribution from a lot of different things," said Shawn McCambridge, grains analyst at Jefferies Bache. "The market kind of fed upon itself" Corn futures jumped 1.1 percent on spillover strength from wheat's gains. Traders also noted bargain buying following Monday's steep decline.
Soyabean futures were mixed, with the nearby contract sagging as investors exited long positions they had built up as the market rallied to a six-month high last week. But new-crop contracts gained in a last-minute bid to entice US farmers to devote additional acreage to soya as they finalise planting decisions. Chicago Board of Trade May soft red winter wheat settled up 18-1/4 cents at $6.59 a bushel. The front-month contract peaked at $6.71-3/4, its highest price since November 1. Worries about winter wheat development in key growing areas of the United States persist as the crop begins to break dormancy. "The US Plains are the area of concern as dryness has persisted," Sterling Smith, Citigroup market strategist, said in a note to clients. "Recent precipitation in Texas has been beneficial, but the main production area from Oklahoma north through Kansas remains very short of soil moisture."
USDA's weekly state crop reports issued late on Monday showed wheat condition ratings improved in Kansas and Texas but declined in Oklahoma. CBOT May corn was up 5 cents at $4.83-1/4 a bushel, also breaking through resistance at its 200-day moving average. CBOT May soyabeans were down 5-3/4 cents at $14.13 a bushel while the new-crop November soyabean contract was 13 cents higher at $11.89-1/2 a bushel. "Beans still have plenty of issues to sort out after yesterday's report, needing to shut off old-crop export demand but also spur 2014 plantings," said Matt Zeller, director of market information at INTL FCStone.