Chicago | Reuters — U.S. wheat prices rose to roughly seven-month highs on Tuesday as low crop ratings and limited chances of rain in drought-hit parts of the Plains growing region kept attention on the risk of yield losses.
The gains were fueled by U.S. Department of Agriculture data released late on Monday that rated the wheat crop in top growing state Kansas at only 12 per cent in good to excellent condition, down two points from a month ago.
Wheat ratings also declined in Oklahoma, Montana, the Dakotas, Nebraska and Colorado.
“One important reason for the poor plant assessments is the drought that has over 70 per cent of Kansas and the whole of Oklahoma in its grip,” Commerzbank analysts said in a note.
K.C. March hard red winter wheat surged about 2.6 per cent, or 11-1/4 cents, to settle at $4.89 per bushel (all figures US$).
Global benchmark Chicago Board of Trade March wheat was up about one per cent or 3-3/4 cents at $4.63-1/4. Both were the highest since late July.
Severe cold in Europe this week was also keeping attention on weather risks, although snow cover was expected to limit the impact of deep frosts in top wheat exporter Russia.
Soy prices were sharply higher, with soymeal futures reaching life-of-contract peaks as scant rainfall in Argentina continued to threaten harvest prospects in the No. 3 global producer after Brazil and the U.S.
However, the impact on global supply could be curbed by Brazil’s harvest which some forecasters expect to set a record volume.
CBOT corn futures edged up to the highest since September, largely tracking gains in wheat and soy while worries of a smaller Argentine corn harvest pushed more export demand to U.S. shippers.
CBOT March soybeans were up 3-3/4 cents or 0.3 per cent to $10.38 per bushel and March soymeal up $9.30 or about 2.5 per cent to $386.50 per ton.
CBOT March corn was two cents higher at $3.70-1/2.
A meeting between President Donald Trump and senators representing the oil and corn industries failed to yield an agreement on how best to lower the cost of the United States’ biofuels policy to refiners.
The lack of a resolution stoked optimism that the U.S. corn ethanol policy could be safe from a major overhaul at least in the very near term.
— Michael Hirtzer reports on commodity markets for Reuters from Chicago; additional reporting by Naveen Thukral in Singapore, Gus Trompiz in Paris and Jarrett Renshaw in New York.Tagged argentina, cbot, closing markets, corn futures, crop ratings, K.C., Kansas, soybean futures, wheat futures