Grain futures edge higher, wheat at 4-1/2 month high on unfavorable weather in Argentina

Wheat futures rose on Monday as overall unfavorable weather conditions in North America, South America and Europe continued to impair field works. Wheat rose to the highest since June.

On the Chicago Board of Trade, wheat December futures traded at $7.0938 per bushel at 10:00 GMT, up 0.42% on the day. Prices surged to a session high of $7.113 a bushel, the strongest level since June 4, while days low stood at $7.0438. The grain added 2.9% on Friday, the most in more than a month, and settled the week 1.9% higher, adding to the previous two weeks combined 1.6% advance.

Wheat surged to multi-month highs on Monday after the Argentine Agriculture Ministry reported that about 100 000 hectares of wheat were damaged in the Entre Rios and La Pampa provinces by cold and dry weather. Argentina is the second biggest exporter in the Southern Hemisphere after Australia. The ministry reported last week that the country will harvest 8.8 million tons of wheat in the 2013-2014 season, below USDAs forecast for 12 million tons.

Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, wrote in a note: “Lower wheat production in Argentina limits their exportable surplus and means Brazil will remain large buyers of U.S. wheat.”

DTN warned on October 18 that a lower temperature pattern during this week could produce some frost in the southern wheat areas, potentially damaging heading wheat. More rain was needed to support the major growing areas but showers were predicted to remain limited in the next five to seven days.

DTN also reported that favorable weather in the Southern Plains will provide suitable conditions for planting and developing of wheat but low temperatures and light rains during the next seven days in the Northern Plains will delay the drying process, slowing down field work.

In Eastern and Western Europe, cool and wet weather will continue to delay harvesting of the late-summer crops and planting of winter wheat and rapeseed but will recharge soil moisture. A recent wet trend in Ukraine and Western Russia has given way to dry weather which improved conditions for the delayed field work to pick up.

Corn and soybeans advance as well

Meanwhile, corn futures for settlement in December rose to a session high of $4.4338 per bushel at 9:58 GMT, up 0.49% on the day, while days low stood at $4.4013 a bushel. The grain fell by 0.5% on Friday but settled the week 1.85% higher.

Soybeans for delivery in November added 0.21% and traded at $12.9438 per bushel at 10:06 GMT. Prices shifted in a days range between $12.9663 and $12.8863 per bushel. The oilseed fell by less than 0.1% on Friday and closed the week 1.8% higher.

DTN reported on October 18 that recent heavy rains in the western Midwest and outlook for below-normal temperatures and light showers in the region will delay the drying process, slowing down field work. In Brazil, heavy rains early this week were expected to delay the planting progress in the countrys southern growing areas, the agency said.