Friday, 13 March 2015 20:45
PARIS/SINGAPORE: Chicago wheat extended gains on Friday to head for a 6 percent rise over the week as adverse growing weather in the United States and took attention away from tepid exports.
Soybeans eased as the market remained under pressure from rising Brazilian supplies and falling US exports. Corn was little changed.
Chicago Board of Trade wheat was trading 0.9 percent higher at $ 5.11-3/4 a bushel at 1159 GMT, after earlier touching a 1-1/2 week high of $ 5.13-1/2 for the second session in a row.
Over the week, the contract was up 6 percent, marking its biggest weekly gain since mid-November.
Dry conditions have added to concerns about the health of some US wheat crops as they emerge from dormancy following a severe winter.
“US hard red winter crops need precipitation but there’s really not that much on the horizon,” said Tobin Gorey, an agricultural commodities strategist at Commonwealth Bank of Australia.
The US winter wheat crop is emerging from dormancy amid dry conditions in the southern plains that could hurt yields if rain does not arrive in the coming weeks.
The weekly US Drought Monitor classified about 70 percent of Oklahoma and 45 percent of Kansas as in “moderate drought”. Both states are major producers of hard red winter wheat, the largest US wheat class, which is used for bread.
But analysts the dollar’s strength remained a drag on the US market and would cap prices despite bouts of short-covering by commodity funds that hold a net short position in CBOT wheat.
“We’re in a weather market that is fuelling wheat prices, but they can’t go too far as this will hit export competitiveness,” Leopold Michallet of French consultancy Agritel said.
The dollar index was firm on Friday after a pause in its rally a day earlier following a 12-year high this week.
CBOT May soybeans slipped 0.4 percent to $ 9.86-1/2 a bushel while May corn edged up 0.2 percent to $ 3.89-1/4.
“We’re really faced with extremely hefty soybean production,” Michallet said.
“The Brazilian harvest is looking good and the truck strike seems to be over.”
Brazil is expected to take a chunk of export business away from US soy.
Weekly US soybean sales were the lowest since mid-January, the Department of Agriculture reported on Thursday.
Brazil’s soybean exports will probably rise to more than 7 million tonnes in March with little risk of further disruption from truck strikes, analyst Pedro Dejnaka, managing partner of AGR Brasil, told the Thomson Reuters Global Ags Forum.
CBOT wheat, corn and soybean futures for March delivery expire on Friday.
Copyright Reuters, 2015
