PARIS/SINGAPORE: Chicago wheat futures edged higher on Monday to a new three-month high, supported by steady global demand and weather risks to southern hemisphere crops.
Soybeans gained for a third consecutive session while corn turned higher as uncertainty over the impact of wintry weather on harvesting in northerly US grain belts underpinned prices.
Price movements were limited as traders awaited further indications on US harvesting from weekly government crop data later in the day, as well as developments in US-Chinese trade negotiations that may lead to more agricultural shipments.
The most active wheat contract of the Chicago Board of Trade had ticked up 0.1% to $5.33 a bushel, as of 1026 GMT.
It earlier touched a fresh high since June 28 at $5.34, slightly above a previous 3-1/2 month peak on Friday.
Worsening crop prospects in southern hemisphere exporters Argentina and Australia, as well as weather-hampered wheat harvests in North America, have shifted attention away from large global stocks of wheat.
“If you look at world supplies there seems to be plenty of wheat, but the supply of milling quality is tightening as some downgrades in the United States have resulted in a lot of feed wheat being produced,” said a Singapore-based trader at an international trading company.
Australia’s wheat production is expected to drop to 15.5 million tonnes, National Australia Bank said on Friday as it cut its forecast to well below recent market estimates.
In Argentina, recent rains have not been strong enough to help wheat fields after weeks of dryness, the Buenos Aires Grains Exchange said on Thursday.
“We are unlikely to have seen an end to the downward revisions in the southern hemisphere,” Commerzbank analysts said in a note.
The rally in wheat has also been fuelled by a run of import tenders that have shown rising cash prices.
Saudi state buyer SAGO on Monday announced the purchase of 605,000 tonnes of wheat at an average price of $242.51 a tonne that was nearly $25 a tonne above what it paid in its previous purchase in early September.
The Saudi tender came after a 405,000 tonne purchase by Egypt last week and is to be followed on Tuesday by a tender from Algeria, another major wheat importer.
CBOT soybeans were up 0.5% at $9.38-1/4 a bushel and corn was up 0.2% at $3.91-3/4 a bushel.
Snowfall and freezing temperatures in northern US states have raised additional risks over ongoing harvesting of corn, soybeans and wheat.
The US Department of Agriculture (USDA) has said it will collect extra data on corn and soybean acreage in Minnesota and North Dakota following the recent snow.
Brisk weekly US export sales reported on Friday were also supporting the soybean market.