Wheat Prices Rise as US Plains Region Hit by Storms

U.S. wheat futures rallied nearly 3 percent on Thursday, more than recouping the previous session's decline, as concern grew about dry weather in the U.S. Southern Plains crop region.

Corn [CCV1 712.75 10.25 (+1.46%) ] futures surged 2.5 percent on renewed rumors that China purchased corn from the United States, traders said. Futures surged 11 percent last Thursday and Friday, when the rumors first emerged. No sale has been confirmed.

"Wheat [WCV1 748.25 8.75 (+1.18%) ] is the leader today and it's all because of weather, the dryness in the Plains. We need the wheat and it now looks like production will be down," said Jack Scoville, an analyst for The Price Futures Group.

Traders and analysts cited mounting concern about crops in the U.S. Plains hard red winter wheat region due to dryness, along with worries that excessive wet weather could hurt the spring wheat crop in the Northern Plains.

The high-protein top quality wheat contracts traded on the Kansas City Board of Trade and on the Minneapolis Grain Exchange were sharply higher, leading the Chicago Board of Trade wheat market up.

While the southern Plains are too dry, incessant rain and snow in the northern Plains could delay planting of the spring wheat crop there. In Australia, meanwhile, excessive rains have decimated the high-protein wheat crop.

"The Plains are a big worry now and, if they don't get good soaking rains soon, some fields will be abandoned and there will be yield reductions," said Shawn McCambridge, an analyst for Prudential Bache Commodities.

CBOT May wheat was up 23 cents at $7.37-1/4 per bushel, May corn was up 9-1/4 at $6.90-1/4 and May soybeans were down 1 at $13.50-1/4 per bushel.

Concern Over Planting of Spring Wheat

KCBT May was up 23 cents at $8.53 per bushel and MGEX May was up 26 cents at $8.85.

"Minneapolis wheat is up because of concern possible flooding in the Red River Valley could delay spring wheat plantings," McCambridge said.

The Red River Valley is where most of the U.S. high-protein spring wheat crop is produced.

A sale of U.S. spring wheat to China seen in the the U.S. Agriculture Department's weekly export sales report also may have boosted Minneapolis spring wheat futures.

"Some of the forecasts had been promising us some rain and now they don't. But the other thing is that China bought some spring wheat in the weekly numbers this morning. It was the first time this year," said Tim Emslie, analyst with Country Hedging.

"Spring wheat's the leader here with the combination of the strong basis due to logistics and the HRS sale made to China," Emslie said.

(Source: http://www.cnbc.com/id/42253469)