Chicago | Reuters— U.S. wheat futures turned higher on Wednesday as worries about crop prospects in top global exporter Russia sparked a round of short-covering, analysts said.
Soybean and corn futures also rallied from early declines as market players remained concerned about dry conditions in Brazil and commodity funds covered short positions ahead of the end of the month and quarter.
Chicago Board of Trade (CBOT) December wheat WZ24 settled up 11-1/4 cents at $5.89-1/4 per bushel after reaching $5.91-1/4, the contract’s highest since Sept. 16.
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CBOT November soybeans SX24 ended up 11 cents at $10.53-1/4 a bushel and December corn CZ24 rose 3-1/2 cents to settle at $4.15-1/4 a bushel.
Wheat rose nearly 2%, the biggest percentage advance of the three markets, as traders monitored crop issues in Russia, the world’s biggest exporter of the grain. Seeding of Russia’s winter wheat crop is off to the slowest start in 11 years due to drought, the Sovecon consultancy said.
“It seems like it is all about Russia,” said Tom Fritz, a partner at EFG Group in Chicago. “Slow planting rates could eventually lead to impacting yields. It’s a little early to say, but it seems like that is the story,” Fritz said.
Russian supplies continue to dominate global export trade but demand could shift to the U.S. eventually, said Craig Turner, a commodity broker at StoneX.
“It’s just a matter of time,” Turner said. “Wheat is a bit of a ‘show-me’ market; you’ve got to see that demand come back to the U.S. But if it does, the funds likely flip from (net) short to long.”
Soybean futures turned up on renewed worries about dry conditions that have stalled the start of planting in Brazil, the world’s biggest producer of the oilseed. Only “spotty” rains are expected over the next two weeks in Mato Grosso, Brazil’s top soy-growing state, the Commodity Weather Group said in a client note.
Earlier forecasts for showers had pressured futures.
Meanwhile, traders await the U.S. Department of Agriculture’s quarterly U.S. grain stocks report on Monday. The quarterly report has a history of jolting CBOT futures prices.
—Reporting for Reuters by Naveen Thukral in Singapore and Sybille de La Hamaide in Paris.
