Chicago | Reuters — Chicago Board of Trade wheat futures rose more than four per cent on Monday as dry conditions in parts of the U.S. Plains, coupled with hot weather this week, prompted investors to cover positions, traders said.
Corn followed wheat up and soybeans closed fractionally higher as traders focused on a pair of U.S. Department of Agriculture reports, on U.S. quarterly grain stocks and planting intentions, due on Tuesday.
At the CBOT, May wheat settled up 22-1/2 cents at $5.30-1/4 per bushel (all figures US$). May corn ended up 3-1/2 cents at $3.94-1/2 a bushel, and May soybeans rose 1/2 cent at $9.67-3/4.
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Wheat’s rally marked the latest in a series of sharp moves over the past two weeks as short-covering and worries about dryness in the Plains offset pressure from poor U.S. wheat exports and a strong dollar.
“The trading funds have a herd mentality. They rush in, they rush out. Today they are rushing in,” said Tom Fritz, a partner at EFG Group in Chicago. “It’s all about concerns over the dryness in the central southern Plains,” Fritz added.
Traders were awaiting the USDA’s plantings report on Tuesday. Analysts expect U.S. farmers to expand seeding of soybeans, sorghum and other crops this year at the expense of corn.
A cool April in the U.S. southern Plains and Delta region will slow some field work, but below-normal rainfall across the main crop belt should prevent any major planting delays this spring, an agricultural meteorologist said last week.
USDA will also release its quarterly U.S. grain stocks report on Tuesday. Analysts expect USDA to report higher March 1 stocks of wheat, corn and soybeans compared with a year ago.
Along with the expectations for increased U.S. soybean plantings, CBOT soybean futures have been under pressure as farmers gather record harvests in South America.
Meanwhile, port workers at the Argentine grains hub of Rosario will hold a 24-hour strike on Tuesday in solidarity with a general work stoppage throughout the country on the same day over tax policy.
— Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Sybille de La Hamaide in Paris and Naveen Thukral in Singapore.
