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GRAINS-U.S. wheat futures jump as global harvest expectations fall

(Recasts, updates with U.S. trading, adds new analyst quote, changes byline/dateline; pvs LONDON)

By Mark Weinraub

CHICAGO, July 25 (Reuters) - U.S. wheat futures surged to eight-week highs on Wednesday, supported by concerns about crop shortfalls in key production areas around the globe, traders said.

The strength in wheat lifted corn futures to their highest in more than three weeks. Corn also received support from concerns about dry conditions limiting harvest yields in parts of the U.S. Midwest.

Soybean futures were slightly lower, with the market technically weak after failing to break through Tuesday's high.

The most-active Chicago Board of Trade soft red winter wheat contract jumped 5.2 percent, on track for its biggest daily percentage gain since July 3, 2017. Prices topped out at $5.39-1/2 a bushel, their highest since May 29.

MGEX spring wheat and K.C. hard red winter wheat futures also posted strong gains.

Consultancy Strategie Grains has again cut its estimate for this year's EU soft wheat crop, which is now expected to be below 130 million. This would be the lowest soft wheat harvest in the 28-member bloc since 2012, analyst Laurine Simon told Reuters.

In Russia, the world's top wheat exporter, yields are around a three-year low, according to agriculture consultancy SovEcon.

In the United States, scouts on annual tour found below average yield prospects for hard red spring wheat in the southern half of North Dakota and adjacent areas of South Dakota.

"That contrasts with crops ratings and USDA's July estimate showing much better yields following last year's drought on the northern Plains," Farm Futures analyst Bryce Knorr said in a note to clients.

At 10:31 a.m. CDT (1531 GMT), Chicago Board of Trade July soft red winter wheat futures were 26-3/4 cents higher at $5.37 a bushel.

Analysts Agritel said there were serious concerns about crops "from the Atlantic to Urals," and although they remain mainly focused so far on Europe and the Black Sea, "this is enough to change the game."

CBOT September corn futures were up 6 cents at $3.58 a bushel.

CBOT November soybean futures were 1/2 cent lower at $8.72-3/4 a bushel.

Losses in the soybean market were limited by the Trump administration's plan to provide up to $12 billion in aid to shield farmers from economic pain stemming from trade disputes.

"Farmers could now use the announced funds, for example, to store soybeans rather than sell them off cheaply. This would reduce supply on the market and shore up the price," Commerzbank said in a market note. (Additional reporting by Naveen Thukral in Singapore and Nigel Hunt in London; Editing by Bernadette Baum)

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