Monday, 23 March 2015 20:02
PARIS/SINGAPORE: US wheat gained more than 1 percent on Monday, rising to its highest in almost five weeks as dry weather in the United States and Russia prompted short-covering by investors.
Soybeans and corn rose to their highest in more than a week with weakness in the dollar providing additional support to agricultural markets.
Chicago Board of Trade May wheat climbed 1.1 percent to $ 5.36 a bushel by 1230 GMT, after hitting $ 5.40-1/2 earlier in the session, the highest since Feb. 17. The market rose 3.5 percent on Friday.
May soybeans gained 1.0 percent to $ 9.80-3/4 a bushel, after hitting a 10-day high of $ 9.82-1/2 a bushel and having firmed 1.2 percent on Friday. Corn was 0.7 percent higher at $ 3.89 a bushel, after touching $ 3.91-1/4, its highest since March 12. It had gained 3.1 percent in the previous session.
“The weather is not all that favourable for wheat crops as we have seen limited rainfall in Russia and US winter wheat is also suffering from dry weather,” said Kaname Gokon, general manager of research at brokerage Okato Shoji in Tokyo.
US wheat plants have faced a lack of moisture plus severe cold spells this winter, despite some showers in recent days.
The Plains revert to a drier pattern for the next 10 days, with only patchy relief from a few showers in the 11-to-15-day outlook, the Commodity Weather Group said on Friday.
Russia’s 2015 grain crop may fall short of official forecasts as the condition of winter grains in some key growing regions has deteriorated since last year, the managing director of a large Russian agricultural group said.
Wheat and rapeseed yields will fall this year in the European Union but remain above the average of the past five seasons, helped by a mild winter, the bloc’s crop monitoring service forecast on Monday.
Investment funds had built up short positions in wheat, corn and soybeans at the beginning of the month as export demand for US supplies waned and the dollar rose to its highest in more than a decade.
“Short-term oriented market participants may have facilitated the price surge by covering shorts,” Commerzbank said in a note.
But the dollar started the week on the defensive after a volatile few days in the wake of the Federal Reserve’s dovish steer, which cast doubt on bullish positions in the greenback.
Copyright Reuters, 2015
