Tags: Wheat | Weather | Worries | Rally

Wheat Jumps 2% as Weather Worries Spark Rally

Wednesday, 25 May 2011 02:19 PM

U.S. grains rallied Wednesday, with wheat futures climbing 2 percent and rising for the first time in a week, on renewed weather concerns in Europe and the United States.

Corn and soybeans also rose, as rain has delayed seeding both U.S. crops and could reduce yields. Corn and soy were rebounding from sharp sell-offs earlier this week due to the rapid pace of plantings over the past several weeks.

Gold and oil futures also rose in a broad commodities rally, with the Reuters-Jefferies CRB commodities index rising for the second straight day.

Wheat for July delivery surged 2.2 percent, or 17-3/4 cents, to $7.97-1/2 per bushel, after four straight sessions of losses.

Spring wheat futures at the Minneapolis Grain Exchange outperformed wheat futures in Chicago and Kansas City, surging as much as 3 percent and passing $10 per bushel.

"We've got some weather issues right now. We're not drying out and we're not really warming up," said Jack Scoville, analyst at The Price Group in Chicago. "We need some of that to happen here and, at least for the next few days, it doesn't look like it's going to."

Showers in the northern U.S. Plains put spring wheat plantings behind schedule, with planting only 34 percent complete in the top wheat state of North Dakota, down from the normal pace of 85 percent.

In the eastern Midwest, showers were expected to bring the final corn and soybean seedings to a standstill this week.

"This is going to be the second wettest week since the planting season began," said Tim Hannagan, grains analyst at brokerage PFG Best.

Hannagan said the wet weather helped to prop up prices after corn and wheat suffered their worst one-day drop on Tuesday in about two weeks.

"The break in the market has brought in some short-covering and some new buying. Today is merely a bounce," Hannagan said.

CBOT July corn and July soybeans were poised for the biggest one-day climb in a week as each contract shook off two days' of losses.

July corn was up 1.5 percent, or 11 cents, to $7.44-1/4 per bushel and soybeans gained 8-1/4 cents to $13.80-1/2 as of 11:40 a.m. CDT (1640 GMT).

About 80 percent of the corn crop was planted as of Sunday, according to the U.S. Agriculture Department, but rains may bring plantings to halt this week.

However, grain futures may resume their decline as traders take profits ahead of the three-day weekend surrounding the U.S. Memorial Day holiday, which always falls on the last Monday of May.

"It's the end of the month and funds always take month-end profits," Hannagan said.

Next week, weather in the Corn Belt is also forecast to be drier as a high-pressure ridge moves warmer temperatures into the eastern part of the region.

"Growers are really anxious to get a jump on that," Hannagan said. "Next week, the planting window is going to be as wide as it has been all year."

© 2017 Thomson/Reuters. All rights reserved.

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U.S. grains rallied Wednesday, with wheat futures climbing 2 percent and rising for the first time in a week, on renewed weather concerns in Europe and the United States. Corn and soybeans also rose, as rain has delayed seeding both U.S. crops and could reduce yields. Corn...
Wheat,Weather,Worries,Rally
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2011-19-25
 

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