Wheat rose in Chicago on speculation that rain forecast in the next few days will be too light to ease dryness in the U.S., while a government report today may show crop conditions deteriorated.
The central U.S. Plains will see "meager" rain amounts this week totaling about 0.2 inch (0.5 centimeter), after much of the region received less than half of normal precipitation in the past 30 days, according to a QT Weather report. Wheat crops from Kansas to Texas worsened in recent weeks because of dry conditions, according to statewide reports from the U.S. Department of Agriculture. The agency is scheduled to start releasing weekly reports on national crop ratings today.
"Prices should be supported by the rise of the temperatures and the lack of moisture in the U.S. and western Europe," Arnaud Saulais, a broker at Starsupply Commodity Brokers in Nyon, Switzerland, wrote in an e-mailed note. "The expected bullish U.S. crop rating" report may support the market further, he said.
Wheat for delivery in May advanced 0.8 percent to $6.7525 a bushel by 7:03 a.m. on the Chicago Board of Trade. Futures fell 3.7 percent last week, the biggest such decline since Jan. 10. The grain advanced 12 percent this year as dry, cold conditions threatened crops.
Twenty-five percent of wheat in Kansas, the main grower of winter varieties, was in poor or very poor condition as of March 30, up from 21 percent a week earlier, the USDA said last week. About 59 percent of crops in Texas and 44 percent in Oklahoma also received the lowest ratings. The USDA last released national condition ratings in November, before crops went into winter dormancy, estimating then that 8 percent of crops in major U.S. growing areas were in poor or very poor shape.
Milling wheat for delivery in November added 1 percent to 199.50 euros ($273.87) a metric ton on NYSE Liffe in Paris. Much of central Europe had less than 60 percent of normal rain in the past 60 days, with the driest regions covering central and western Germany and northeastern France, according to World Ag Weather. Central Ukraine also saw below-normal rain, according to the forecaster.
"In the Black Sea region, rainfall patterns are favorable for the development of the Russian wheat crop, but the low- pressure system is tracking too far north to bring more than modest relief to the dry conditions in Ukraine," Australia & New Zealand Banking Group Ltd. analysts including Paul Deane wrote in a report.
Corn for delivery in May lost 0.4 percent to $4.995 a bushel in Chicago, after rising 2 percent last week. Soybeans for the same delivery month climbed 0.2 percent to $14.765 a bushel, extending last week’s 2.6 percent increase.