U.S. grains: Wheat rallies on Plains dryness, technical buying

Chicago | Reuters — U.S. wheat futures surged nearly three per cent on Tuesday on technical buying and crop production concerns due to dry weather in the U.S. Plains wheat belt and other major production areas around the globe.

Corn futures advanced on spillover support from wheat, while soybeans advanced on follow-through buying from Monday’s strong gains.

Wheat recovered all of its prior-session losses that stemmed from rain in the U.S. Plains, where a large share of the milling wheat crop has suffered under a severe drought this year.

The U.S. Department of Agriculture said just 36 per cent of the U.S. winter wheat crop was in good-to-excellent shape as of Sunday, compared with 52 per cent at the same point last year.

“We got some rain, but the market is worried that maybe it’s a little bit too late to have an impact at this point,” said Ted Seifried, analyst with Zaner Ag Hedge.

Dry weather in parts of Canada, eastern Australia and southern Russia, all major wheat exporters, also gave prices a lift.

Chicago Board of Trade July soft red winter wheat was up 14-1/4 cents, or 2.8 per cent, at $5.21-1/2 a bushel, while K.C. July hard red winter wheat was up 14 cents, or 2.7 per cent, at $5.40-1/2 a bushel (all figures US$).

Both ended well above all key moving averages but closed below session highs.

Better-than-expected U.S. soybean planting progress capped the market after the USDA said 56 per cent of the crop had been seeded as of Sunday, well ahead of the five-year average of 44 per cent.

Corn planting was 81 per cent completed, in line with the average pace, USDA said.

CBOT July soybeans were up 5-1/4 cents at $10.20-1/2 a bushel, settling near its 100-day moving average. The contract failed to breach chart resistance at its 50-day moving average.

CBOT July corn added two cents to $4.04-3/4 a bushel.

— Karl Plume reports on agriculture and agribusiness for Reuters from Chicago; additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore.

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