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U.S. grains: Spring wheat futures climb on weather worries

CBOT corn, soy edge higher

Chicago | Reuters — U.S. spring wheat futures traded on the Minneapolis Grain Exchange (MGEX) closed higher on Monday for a fourth straight session on fears of hot, dry weather in the northern Plains, while corn and soybean futures ended fractionally higher.

MGEX July spring wheat ended up 5-1/4 cents at $5.89 per bushel and Chicago Board of Trade July wheat settled unchanged at $4.29-1/2 (all figures US$).

CBOT July corn ended up 1/4 cent at $3.73 a bushel while July soybeans finished up 3/4 cent at $9.22 a bushel.

MGEX spring wheat futures were a bright spot in an otherwise choppy grains sector, climbing on weather worries at a time when traders are concerned about supplies of high-protein wheat.

About one-quarter of North Dakota, the top U.S. spring wheat producer, is under a moderate drought, according to the latest weekly U.S. Drought Monitor report. Forecasts called for warm weather in the coming days.

“Light and scattered showers are possible across the northern Plains late (Tuesday) and Wednesday, but should not lead to any significant improvement in soil moisture. Above-normal temperatures in the northern Plains over the next week will only worsen dryness,” MDA Weather Services said in a note to clients.

Temperatures at Aberdeen in northeastern South Dakota reached a record-high 100 F (37.8 C) on Friday, the National Weather Service said.

After the markets closed, the U.S. Department of Agriculture rated 55 per cent of the U.S. spring wheat crop in good to excellent condition, down from 62 per cent a week earlier. Analysts surveyed by Reuters had expected a drop of one percentage point, to 61 per cent good-to-excellent.

CBOT wheat settled flat, pressured by the start of the U.S. winter wheat harvest. The harvest was 10 per cent complete by Sunday, USDA said.

CBOT soybean futures edged higher after a seesaw session, supported by technical buying and fund short-covering after the supplement to the U.S. Commodity Futures Trading Commission’s weekly Commitments of Traders report showed that funds expanded big net short positions in soybeans and corn.

Large speculators stretched their net short in CBOT soybean futures to 113,391 contracts in the week to May 30, the CFTC report showed, the widest since March 2016.

A large net short position leaves the market vulnerable to bouts of short-covering.

Also bullish, USDA said private exporters sold 120,000 tonnes of U.S. soybeans to unknown destinations.

USDA said the U.S. soybean crop was 83 per cent planted as of Sunday, ahead of the five-year average of 79 per cent.

Corn ratings improved. The government rated 68 per cent of the U.S. corn crop as good to excellent, up from 65 per cent a week earlier and above an average of analyst expectations of 67 per cent.

— Julie Ingwersen is a commodities correspondent for Reuters in Chicago. Additional reporting for Reuters by Nigel Hunt in London and Naveen Thukral in Singapore.

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