Grain futures advanced on Friday, wheat headed for the largest monthly increase since July as the recent adverse weather conditions in the US, the biggest global exporter, were seen harming crops.
On the Chicago Board of Trade, wheat futures for settlement in May added 0.94% to trade at $5.9513 per bushel by 13:43 GMT. Prices touched a session high of $5.9838 per bushel, while day’s bottom was touched at $5.9012 a bushel.
The grain headed for a 7.2% advance this month, which would be the largest increase since July 2012, after plunging 8.3% in January and 9.5% in December, on expectations for a record global output of 712.7 million tons, according to data by the US Department of Agriculture.
Wheat prices were pressured after adverse weather conditions in the US, the world’s biggest exporter, were seen damaging crops in the US Midwest and the Southern Plains.
On February 18, the Texas Department of Agriculture reported that nearly 44% of Texas winter wheat was in poor or very poor condition as of the week ended February 16, up from 41% in the previous week.
“It’s been a long hard winter for those guys and once we see that crop emerge from dormancy, we will start to see some U.S. numbers firming up,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, said in a Bloomberg interview. “There are certainly pockets of concern out there.”
Yesterday, the International Grains Council forecast that global wheat production may drop to 696 million metric tons in 2014-15, down from a record 708 million tons a year ago.
DTN’s February 27th forecast called for another round of extreme cold over the US Midwest. During the weekend a major snow and ice event is predicted to shape up in the southern and eastern Midwest and the northern Delta region.
Meanwhile, a return to colder weather is also expected over the Southern Plains scattered light to locally moderate precipitation is expected during the weekend, which will be beneficial for the dormant wheat.
Elsewhere on the grains market, corn futures for May delivery rose by 0.14% to trade at $4.5563 a bushel by 13:43 GMT. Futures hit a session high at $4.5688 per bushel, while day’s low was touched at $4.5388 per bushel. On February 26th, prices touched $4.6462 per bushel, the strongest since September 17. Corn has advanced 8.5% this year after it lost nearly 40% in 2013, the steepest annual drop on record and the worst annual performance since at least 1959.
Soybeans ease off from 7-month high
On the Chicago Board of Trade, soybeans futures for settlement in May, added 0.34% to trade at $13.9413 per bushel by 13:45 GMT. Futures touched a session high at $13.9912 per bushel, while day’s low was hit at $13.7738 per bushel. Yesterday, prices touched a session high at $14.4375 per bushel, the strongest since July 24th. The grain settled last week 2.5% higher, after adding 0.5% in the previous 5-day period. However, the oilseed has lost 8.5% in 2013.
According to a report by Oil World, a Hamburg-based researcher, harvest in Brazil, the second largest exporter of soybeans, will be 85 million metric tons in the 2013-14 season, down from 89.5 million tons estimated in January.
Brazil’s soybeans crops have been curbed by a recent drought in the country, but weather forecasts called for an end of the dry period, which will relieve some stress on developing crops.
DTN.com reported on February 27th that periodic scattered showers and seasonal temperatures will be beneficial for filling crops and early developing second crop corn.
Due to showers local delays in harvesting of early crops and planting the second crop corn will occur.
Meanwhile, a dry weather trend is expected in central Argentina during the next week. The warmer temperatures will be beneficial for developing crops, after recent heavy rainfall.
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