Friday, 13 March 2015 01:31
CHICAGO: US wheat futures rose for a fifth straight session to a 1-1/2 week high on Thursday on short-covering and worries over potential yield losses due to dry weather in parts of the U.S. Plains, analysts said.
Corn was lower and soybeans were mixed in choppy trade, with both products retreating from early gains on disappointing weekly U.S. export sales data. However, a setback in the dollar underpinned the market.
At the Chicago Board of Trade as of 11:35 a.m. CDT (1635 GMT), May wheat was up 10 cents at $ 5.09 per bushel. May corn was down 2 cents at $ 3.89 a bushel and May soybeans were up 1/2 cent at $ 9.93-1/4 a bushel.
May wheat reached $ 5.13-1/2, the contract’s highest level since March 2, after breaking through resistance at its 20-day average near $ 5.06.
The U.S. wheat crop is emerging from dormancy amid dry conditions in the southern Plains wheat belt that could hurt yield potential if rains do not arrive in the coming weeks.
The weekly U.S. Drought Monitor showed dryness easing in parts of Texas in the last week, but 70 percent of Oklahoma and 45 percent of Kansas, the top U.S. winter wheat state, were classified as experiencing “moderate drought.”
“The developing dryness in the U.S. Plains could become an issue at some point. There is not a ton of rain in the forecast, and that is the heart of winter wheat country,” said Joe Vaclavik, president of Standard Grain, a Chicago brokerage.
Also, commodity funds hold a hefty net short position in CBOT wheat, leaving the market open to short-covering.
Corn fell, retreating from early gains, after the U.S. Department of Agriculture reported the smallest weekly export sales in two months. Weekly soybean sales were the lowest since mid-January.
“The export sales were a little disappointing. We don’t look for big sales this time of year, but what we saw this morning was a disappointment to the trade,” said Brian Hoops, president of U.S. brokerage Midwest Market Solutions.
Copyright Reuters, 2015
