Wheat futures surged last week as concerns grew about dry weather in wheat producing countries including Russia, Ukraine, Kazakhstan, Australia and China. Futures prices eased this week as rain forecasts improved for those regions, but rose again Friday on renewed expectations for dryness.
Rains have returned to southern and eastern Ukraine and the southwestern North Caucasus region, which has helped to improve moisture there, but "notable dryness will continue to stress crops in northeastern portions of North Caucasus, western Kazakhstan, and south-central portions of Volga Valley," MDA EarthSat Weather said in a forecast Friday.
Concerns about dryness also linger for the southern Great Plains, as the U.S. winter-wheat harvest is starting in the key states of Kansas and Oklahoma. Hot, dry weather has already damaged crops there, and analysts are watching for initial reports on yields during the area's harvest in addition to watching weather forecasts.
Early yield reports from Kansas "are not horrible by any means, but this heat and wind that we had here at the tail end sure took the top end of that crop off," said Jason Britt, an analyst with the brokerage Central States Commodities in Kansas City, Mo. "What I would consider an excellent crop became a good crop," helping to boost wheat futures on Friday, he said.
Corn futures also closed mostly higher, lifted by wheat's gains, positioning ahead of a long weekend and ongoing concern about dryness in the eastern corn belt.
CBOT July corn settled flat at $5.78 1/2 a bushel, while December corn rose 6 1/2 cents to $5.21 1/2 a bushel.
Soybean futures also rose on concerns about a mixed rain outlook for the Midwest, and on continued expectations for strong export demand.
CBOT July soybeans rose 6 cents to $13.82 a bushel.
