"The market is up on the dollar being in the tank," said Sid Love, an analyst with Kropf & Love Consulting, an Overland Park, Kan., agricultural advisory firm. With interest rates low, "people are desperately trying to get a return on their money, so they jump into these commodities."
Wheat got an extra boost from Goldman Sachs saying in a research note Friday that it sees increasing upside risks to wheat prices in the coming months. Dry weather in the former Soviet Union, Australia, India and Argentina could pare output in those regions more than currently expected, Goldman Sachs said.
The bank's remarks may have led speculative funds to boost buying of wheat futures, said Mike O'Dea, a risk-management consultant at brokerage INTL FCStone.
Wheat futures, which snapped a three-day slide, have mostly climbed for weeks. Front-month Chicago Board of Trade wheat futures hit a four-year closing high of $9.4325 a bushel July 20, jumping 55% in roughly a month. The rise mainly stemmed from a rally in corn prices, because more-expensive corn can boost demand for wheat as a substitute in animal feed. Corn soared to all-time records last month as the historic U.S. drought battered the Farm Belt.
CBOT September wheat rose 26 1/4 cents, or 3.0%, to $8.91 1/4 a bushel. Kansas City Board of Trade September wheat rose 27 cents, or 3.1%, to $8.96 a bushel. MGEX September wheat rose 18 cents, or 1.9%, to $9.44 1/2 a bushel.
Corn and soybean futures were boosted by analysts forecasting lower yields for the two crops than previously expected.
Traders said analytical firm Informa Economics on Friday cut its outlook for the U.S. corn harvest due to the historic drought, predicting the U.S. Department of Agriculture next week will forecast a corn yield of 120.7 bushels an acre. Informa pegged the average soybean yield at 37.2 bushels an acre, compared with its July estimate of 40 bushels an acre, traders said.
Rains are set to move across the Corn Belt this weekend, and traders are waiting to see actual rainfall levels afterward. Forecasts overall remain hot and dry, which is negative for the soy crop as it is in its key development phase of setting pods and filling them out with beans.
