Chicago wheat futures rose for a fourth consecutive session on Monday to hit a two-month top as adverse weather in parts of the U.S. and Russian growing areas raised worries about global supplies.
Corn climbed 2% while soybeans gained 1%, with both markets at their highest since early July.
“These gains seem to be largely driven by weather concerns but it does seem a bit premature though,” said Ole Houe, director of advisory services at brokerage IKON Commodities in Sydney.
“We remain bullish longer term but this rally seems to have arrived at least a couple of months too early.”
The most-active wheat contract on the Chicago Board of Trade (CBOT) rose 1.6% to $7.03-3/4 a bushel by 0256 GMT, near the session high of $7.10 a bushel – the highest since May 18.
“The weather in the Plains is too hot, too dry, and the market is adjusting their supply estimates,” said one Melbourne-based grains trader, who declined to be named as he is not authorised to talk to the media.
The U.S. Department of Agriculture last week said farmers in the northern U.S. Plains were on track to harvest the smallest spring wheat crop in 33 years, reflecting the impact of severe drought in the key farming region.
Supply fears have also emerged for Russia, the world’s top wheat exporter, due to sub-par yields in the key southern export region.
IKAR has cut its forecast for Russia’s 2021 wheat crop to 81.5 million tonnes from 83.5 million tonnes, the agriculture consultancy said last week.
Corn climbed 2% to $5.62-3/4 a bushel and soybeans were up 1.2% at $14.08-3/4 a bushel.
Analysts said soybeans were supported too by the hot, dry weather in the United States as the crop approaches its key pod-setting phase.
Large speculators cut their net long position in CBOT corn futures in the week to July 13, regulatory data released on Friday showed.
The Commodity Futures Trading Commission’s weekly commitments of traders report also showed that noncommercial traders, a category that includes hedge funds, increased their net short position in CBOT wheat and cut net long position in soybeans.
Source: Reuters (Reporting by Naveen Thukral; additional reporting by Colin Packham in Canberra; Editing by Subhranshu Sahu)