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Wheat hits two-week high on US, Russia crop concerns

Wheat hits two-week high on US, Russia crop concernsLONDON: US wheat prices rose to a two-week high on Tuesday, boosted by concern about dry weather in both the United States and Russia, while soybeans fell to their lowest level since early February.

“Dryness in the U.S. is awakening fears concerning winter wheat conditions,” analysts Agritel said in a market update.

“The market is also paying attention to weather conditions in Russia where sowings are taking place and a lack of rains is also registered,” the analyst added.

Warm and dry weather across the European part of Russia has raised concerns for the country’s 2015 crop, analysts said on Monday.

Chicago Board of Trade May wheat was up 0.2 percent to $ 5.15 a bushel at 1101 GMT after earlier rising to a two-week high of $ 5.18.

“There is more upside potential for wheat prices, the U.S. crop badly needs rainfall but not much is forecast,” said Kaname Gokon, general manager of research at brokerage Okato Shoji in Tokyo.

“We expect the May contract to rise above $ 5.20 a bushel.”

Kansas winter wheat was rated 41 percent good to excellent, down from 46 percent in the previous week, the U.S. Department of Agriculture (USDA) said. Oklahoma winter wheat was rated 40 percent good to excellent, down from 42 percent the week before.

May wheat futures in Paris rose 1.00 euro or 0.5 percent to 193.75 euros a tonne.

Soybean prices were lower, with sowings in the United States looking likely to exceed initial forecasts.

The USDA last month forecast the U.S. soybean area at 83.5 million acres, but last week research and brokerage firm Allendale projected plantings at a record 86.05 million.

“Surveys of farmers suggest that acreage has been significantly expanded, whereas the USDA actually estimated a marginal decline,” Commerzbank said in a market note.

Commerzbank also said the recent weakness of Brazil’s real currency had also increased the competitiveness of the country’s soybean exports against rival U.S. supplies.

CBOT May soybeans were off 0.3 percent at $ 9.66-1/2 a bushel after earlier dipping to a low of $ 9.65-1/4, their weakest level since early February.

Corn prices eased, depressed by slowing demand for record-sized U.S. supplies.

The USDA said on Monday morning that weekly export inspections of corn were 735,311 tonnes, down from 1.18 million tonnes a week ago and below the low-end of trade forecasts ranging from 900,000 to 1.1 million tonnes.

CBOT May corn fell 0.3 percent to $ 3.77-3/4 a bushel.

Copyright Reuters, 2015

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