Wheat rose to a three-week high in Chicago on speculation persistent dry weather and low temperatures will erode winter crops in the U.S., the world’s biggest exporter. Corn extended its longest rally in a year.
No significant precipitation is expected in the southern and central U.S. Great Plains in the next 10 days and northern regions may be dry for the next seven days, forecaster DTN said in a report today. Wheat-growing areas in the northern Midwest may have temperatures near zero degrees Fahrenheit (minus 18 degrees Celsius) starting Jan. 22. The U.S. winter-wheat crop was in the worst condition since 1985 as of the end of November after dry weather, Department of Agriculture data show.
“Grain markets keep rising as fear about the condition of the U.S. wheat crop is growing,” Paris-based farm adviser Agritel said today in an online comment. “It is still too early to assess the real impact of the water deficit on the production,” and lower temperatures threaten crops, it said.
Wheat for delivery in March climbed 0.7 percent to $7.88 a bushel at 6:56 a.m. on the Chicago Board of Trade. The grain touched $7.9075, the highest price since Dec. 26. In Paris, milling wheat for the same delivery month increased 1 percent to 255 euros ($338) a metric ton on NYSE Liffe.
Corn for delivery in March gained 0.3 percent to $7.33 a bushel in Chicago. The most-active contract rose for a seventh session yesterday, the longest winning streak since an eight-session rally ended Dec. 28, 2011. Soybeans for March delivery added 0.6 percent to $14.225 a bushel. Both crops climbed to records last year because of the worst U.S. drought since 1956.
Dryness may increase stress on crops in Brazil, set to surpass the U.S. as the world’s biggest soybean exporter. Mostly dry weather in the next 10 days may deplete soil moisture in Rio Grande do Sul state, DTN said. Global soybean supplies on Sept. 30 will be 59.46 million tons, below 59.93 million forecast in December, the USDA said Jan. 11. Corn output will be 115.99 million tons, under the prior 117.61 million-ton forecast.
“Things are still pretty tight,” Victor Thianpiriya, an agricultural analyst at Australia & New Zealand Banking Group Ltd., said by phone from Singapore today. The USDA “didn’t do a lot to the global balance sheet. Carryout is tight. It’s still the same theme,” he said.