Chicago wheat prices rose to a one-month high on Friday as forecasts of storms over US hard red winter crop areas heightened crop concerns and prompted further short covering. Corn rose for a fourth consecutive session, supported by the rally in wheat, while soybean prices also edged up. July wheat on the Chicago Board of Trade was up 0.6 percent at $5.17-1/2 a bushel at 1038 GMT after earlier climbing to a one-month peak of $5.19-3/4.
Heavy rains are forecast across the US Plains, stoking fears of potential crop damage. "The catalyst seems to have been an evolving storm pattern in US hard red winter wheat regions," Tobin Gorey, director of agricultural research at Commonwealth Bank of Australia, said in a note to clients.
"It was pre-winter drought and then little or no winter snow left the crop in peril. Rainfall arrived with the timing of an irrigators tap, though, to avert disaster in April. Now the threatened soaking is again putting the crop at peril and that rightly has markets worried."
The unfavourable weather comes as an El Ni?o climate phenomenon is almost certain to last through the Northern Hemisphere's summer, the US National Weather Service's Climate Prediction Center said on Thursday. It raises the chance of heavy rain in the southern United States as well as South America, and scorching heat in Asia that could devastate staples like rice.
September wheat in Paris rose 1.0 percent to 177.75 euros a tonne. Dealers noted a slowdown in the pace of EU wheat exports with the outlook also dimmed by the prospect of increased competition from the Black Sea region. Russian exporters will pay no fees for selling wheat abroad from Friday until the introduction of a new export duty, calculated under a different formula, from July 1, a spokeswoman for the agriculture ministry told Reuters.
Earlier the government said it had lifted an export duty imposed in February to help dampen rising domestic prices and food inflation following a sharp fall in the value of the rouble. It is now working on the new export duty formula. CBOT July soybeans were up 0.3 percent at $9.59-3/4 a bushel while CBOT July corn rose 0.75 percent to $3.70-3/4 a bushel.