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Wheat Futures Hit One-Year Highs; Corn Gains

05/05/2014 @ 2:52pm

Wheat futures jumped to a one-year high Monday as hot, dry weather imperiled the U.S. crop and unrest in Ukraine fueled worries about grain exports in eastern Europe.

A U.S. winter wheat crop already stressed by drought faced new burdens as temperatures topped 90°F. in parts of Kansas and Oklahoma, and little rain fell over the weekend. More warm weather is expected for wheat-growing regions in the U.S. Great Plains this week, according to private forecaster Commodity Weather Group LLC.

Wheat for May delivery rose 13 1/2 cents, or 1.9%, to $7.21 1/4 a bushel on the Chicago Board of Trade, the highest settlement for a front-month contract since April 30, 2013. Wheat for July delivery, the most actively traded contract, rose 1.8% to $7.29 a bushel.

Participants on a closely watched wheat tour in Kansas last week measured winter-wheat yields in the state at 33.2 bushels an acre, the lowest in seven years, while a separate group projected Oklahoma production at 66.5 million bushels, which would be the lowest since 1957. Winter wheat, used to make bread, is planted in autumn and harvested in late spring and early summer.

At the same time that yield estimates are shrinking for winter wheat, analysts said, wet weather in places like North Dakota is stalling the planting of spring wheat.

Wheat prices also were strengthened Monday by intensified fighting over the weekend in Ukraine, a major wheat exporter. Violence has spilled into the Black Sea port city of Odessa, from which much of the country's grain is exported, leading to concerns that tensions with Russia will cause Ukraine to produce and ship less grain, which could lead wheat buyers to source more supplies from the U.S.

Corn futures also rose Monday despite a better weather forecast for much of the U.S. Midwest and signs that farmers are sowing the grain after a cool, rainy spring delayed fieldwork. Analysts said corn prices had followed the wheat market higher after falling in the two previous sessions. The two grains often trade in tandem because they are substitutes in animal feed.

CBOT May corn advanced 9 1/4 cents, or 1.9%, to $5.03 1/4 a bushel. Most-active July corn futures gained 1.7% to $5.08 a bushel.

Soybean futures fell on signs that domestic processors of the oilseeds are importing soybeans from overseas sellers. CBOT May soybeans dropped 8 3/4 cents, or 0.6%, to $14.72 a bushel. Most-active July soybean futures slipped 0.5% to $14.63 1/4 a bushel.


Write to Jesse Newman at jesse.newman@wsj.com
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(END) Dow Jones Newswires
May 05, 2014 15:12 ET (19:12 GMT)
DJ Wheat Futures Settle at One-Year High; Corn Gains->copyright

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