Forexpros – Wheat futures were up for a second day during European morning trade on Tuesday, climbing to a seven-day high as market participants continued to monitor crop conditions in the U.S.
On the Chicago Mercantile Exchange, wheat futures for July delivery traded at USD6.3613 a bushel during European morning trade, gaining 0.45%.
It earlier rose by as much as 0.5% to trade at USD6.3663 a bushel, the highest since April 13.
The U.S. Department of Agriculture said in its weekly crop progress report published after markets closed Monday that approximately 63% of U.S. winter-wheat crops were rated in ‘good’ to ‘excellent’ condition as of April 23, down from 64% in the preceding week.
The report showed that about 36% of the Texas wheat crop was in ‘good’ to ‘excellent’ condition, declining from 38% a week earlier, while 32% of the state’s winter-wheat crops were rated ‘poor’ to ‘very poor’.
According to officials, crop development in Kansas was “two to three weeks ahead of the average. Texas is the fifth-largest wheat-growing state in the U.S.
The data added that 57% of the U.S. spring-wheat crop was planted as of last week, up from 37% a week earlier and significantly higher than the five-year average of just 19% for this time of year.
The U.S. is the largest wheat exporter, followed by Australia and Russia, according to the USDA.
Wheat traders have been monitoring U.S. crop conditions in recent weeks, on the view that global supplies of the grain are more than ample to meet demand.
In its Supply & Demand Estimate Report published earlier in the month, the USDA pegged global wheat supplies in the current marketing season at 206.27 million tons, the highest in 11 years.
Global wheat production was projected at a record high 694.32 million tonnes, almost 7% above the previous season’s output level. The previous record was 685.59 million tonnes, recorded in the 2009-10 season.
Wheat prices have been under heavy selling pressure in recent sessions. On April 18, the most-active contract fell to USD6.0925, the lowest since January 20, amid worries over ample global supplies.
Meanwhile, in broader market news, concerns over political instability in the euro zone eased following well received auctions of Dutch and Spanish government debt but investors remained wary over the outlook for the region.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.12% to trade at 79.39.
A weaker dollar boosts the appeal of U.S. crops to overseas buyers and makes commodities more attractive as an alternative investment.
Elsewhere on the Chicago Mercantile Exchange, corn for July delivery added 0.35% to trade at USD6.1363 a bushel, while soybeans for July delivery rose 0.3% to trade at USD14.4625 a bushel.
The USDA said Monday U.S. farmers sold 120,000 tonnes of corn and 165,000 tonnes of soybeans to unknown destinations, amid ongoing market speculation that China had purchased large supplies of both U.S. corn and soybeans.
Corn is the biggest U.S. crop, valued at USD66.7 billion in 2010, followed by soybeans at USD38.9 billion, government figures show. Wheat was fourth at USD13 billion, behind hay.
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