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Wheat hits 2-week highs, pulls up corn, soybeans

04/08/2013 @ 3:19pm

U.S. wheat futures climbed for the second-straight session Monday, settling at a nearly two-week high on signs of improved export demand.

May wheat futures ended up 13 1/2 cents, or 1.9%, at $7.12 1/2 a bushel at the Chicago Board of Trade. Kansas City Board of Trade May wheat rose 19 cents, or 2.6%, to $7.45 a bushel. Minneapolis Grain Exchange May wheat finished up 12 1/4 cents, or 1.6%, at $7.99 3/4 a bushel.

Buying interest in wheat futures has resumed in four of the past five sessions after a sharp drop in prices late last month.

Prices were boosted by reports China had purchased 14 to 16 cargoes of U.S. soft-red-winter wheat and worries a winter storm could harm winter-wheat crops in the U.S. Great Plains, reducing supplies, said Mike Zuzolo, president of Global Commodity Analytics and Consulting Inc. in Lafayette, Ind. The planting of the spring-wheat crop in the northern U.S. plains also helped lift prices, Mr. Zuzolo said.

Monday, media reports cited the state-backed China National Grain and Oils Information Center as saying the country last week ordered 14 to 16 cargoes of soft-red-winter wheat for delivery from the Gulf of Mexico from mid- to late 2013. A cargo is usually between 30,000 and 50,000 metric tons, depending on the vessel used.

The reports boosted confidence in export demand for U.S. wheat, which generally has been weak for months.

"The threat of smaller U.S. wheat-crop production and signs of improved export demand were enough to encourage managed funds to reevaluate bets on prices falling further," Mr. Zuzolo said of Monday's trading.

Money managers including hedge funds had a net short position of 35,026 contracts in CBOT wheat in the week ended Tuesday, U.S. Commodity Futures Trading Commission data showed Friday.

Private weather forecaster Telvent DTN said southwest Plains wheat areas may have damage to the crop from freezing conditions Tuesday and Wednesday. The region is also in a very dry and windy pattern the next couple days, which will stress wheat and deplete soil moisture, Telvent added.

Soybean futures ended higher, supported by investors reducing some risk in the market before Wednesday's U.S. government reports on supply and easing fears about a bird-flu outbreak in China.

CBOT soybeans for May delivery finished up 16 1/4 cents, or 1.2%, at $13.78 a bushel.

Corn futures ended higher on positioning ahead of Wednesday's U.S. Department of Agriculture crop report and improved outlooks for corn-feed demand given its price premium over wheat. Wheat and corn are linked as both are feed grains for the livestock industry.

CBOT May corn ended up 4 1/2 cents, or 0.7%, at $6.33 1/2.

--Owen Fletcher contributed to this article
Write to Andrew Johnson Jr. at
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April 08, 2013 15:20 ET (19:20 GMT)
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