Thursday, February 22, 2024

Spring Wheat Nears 3-Year High Thursday

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The following article is from Dow Jones:

Wheat futures traded at the Minneapolis Grain Exchange soared Thursday, rallying near three-year highs on concerns about possible production declines due to planting delays in the northern Plains.

Minneapolis Grain Exchange July soared 25 3/4 cents to $10.45 3/4 a bushel, Chicago Board of Trade July wheat jumped 18 cents to $8.14 1/2, and Kansas City Board of Trade July gained 14 cents to $9.42 3/4. Traders added risk premium to prices, as mounting concern that planting delays in the northern Plains and in Canada may harm production of high-protein spring wheat from the world’s largest exporter, analysts said.

Wet weather continues to disrupt and delay spring wheat planting across North Dakota with the likelihood that some acreage won’t get planted. “There’s going to be a lot of crop out west that they’re not going to get in,” warns Dave Clough, a farmer in central North Dakota.

Meanwhile, grain dealers are also voicing concern that dry weather is hurting U.S. hard red winter wheat crop, while dryness across France and Germany is now deemed to have done irreparable damage to crops.

The market is supported by a return of speculative money flowing into grain futures, as investors are optimistic for further price gains with so many potential crop problems this year in the U.S. and in Europe.

European wheat prices have surged more than 36{dfeadfe70caf58f453a47791a362966239aaa64624c42b982d70b175f7e3dda2} from their lows of two months ago as the worst drought to hit the region in a decade has driven prices higher and slashed hopes for next years crop.

Grain users are keeping a close eye on the weather as dryness has plagued key growing areas of the southern U.S. Plains and Europe this season. They are on edge about threats to output after weather disasters, including a historic drought in Russia, slashed global output last year. Wheat prices rallied last year on Russia’s drought and reached 2 1/2-year highs in February on a surge in demand.

Europe is a major exporter of grain and competes with the U.S. for business on the global market. Crop losses in Europe could mean increased demand for U.S. grain.

U.S. corn futures ended higher on concerns that farmers are giving up on planting such seed due to weather delays. Excessive rains in the eastern Midwest and North Dakota continue to keep farmers out of their fields late in the planting season, raising fears some farmers will leave land idle to cash in on crop insurance for prevented planting. CBOT July corn ended up 3 1/4 cents to $7.45 1/2 a bushel.

U.S. soybean futures rise in unison with grains, with added support generated from planting delays in the eastern Midwest possibly cutting seeded acreage. CBOT July soy rose 0.6{dfeadfe70caf58f453a47791a362966239aaa64624c42b982d70b175f7e3dda2} to $13.84 3/4 a bushel.

CBOT July soymeal ended up 0.6{dfeadfe70caf58f453a47791a362966239aaa64624c42b982d70b175f7e3dda2} at $360.30/short ton, and July soyoil settled up 1.3{dfeadfe70caf58f453a47791a362966239aaa64624c42b982d70b175f7e3dda2} at 58.70 cent/pound. U.S. rice futures slip on profit-taking after reaching a three-month high, bucking the stronger trend in the grain markets. CBOT July rice drops 4 cents to $15.13 1/2 per hundredweight.

U.S. oat futures extend gains on increasing concerns about rains and cold temperatures preventing planting and hurting crop development in the northern US and Canada. Oats for July delivery rise 9 cents, or 2.4{dfeadfe70caf58f453a47791a362966239aaa64624c42b982d70b175f7e3dda2}, to $3.78 a bushel. Ethanol futures advanced slightly amid modest gains in corn amid concerns farmers won’t plant as much of the grain as expected. Ethanol for July delivery edged up 0.9 cent, or 0.3{dfeadfe70caf58f453a47791a362966239aaa64624c42b982d70b175f7e3dda2}, to $2.644 per gallon.

-By Andrew Johnson Jr., Dow Jones Newswires; 312-347-4604; Andrew.johnsonjr@dowjones.com

(Tom Polansek and Caroline Henshaw contributed to this article.)

 

Source:  Dow Jones

Posted by Haylie Shipp

 

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