Forex Pros – Wheat futures rallied for a second day on Thursday, climbing to a three-day high as concerns over crop conditions in key wheat-growing regions around the world boosted prices.
On the Chicago Mercantile Exchange, wheat futures for July delivery traded at USD8.0862 a bushel during European morning trade, jumping 1.3%.
It earlier rose as much as 1.46% to USD8.1225 a bushel, the highest price since May 23.
The U.S. Department of Agriculture said in its weekly crop-progress report on Wednesday that approximately 45% of U.S. winter-wheat crops were in ‘poor’ or ‘very poor’ condition as of May 22. Only 9% of the U.S. winter-wheat crop was rated ‘poor’ to ‘very poor’ in the same week a year earlier.
The report showed that 32% of the U.S. winter-wheat crop was rated ‘good’ to “excellent” unchanged from the previous week and lower than the five-year average of 66% for this time of year.
Plantings of U.S. spring-wheat was 54% complete as of last week, compared with the five-year average of 89%. Spring wheat crop in North Dakota, the nation’s largest producer, was only 34% planted, versus 84% from the same week a year earlier.
Lingering concerns over crop conditions in Europe also boosted prices. Commerzbank said in a report on Wednesday that dry weather may cause “irreversible damage” to wheat crops in France and Germany, Europe’s biggest wheat producers.
Europe is a major wheat exporter and competes with the U.S. for business on the global market. Crop losses in Europe could mean increased demand for U.S. supplies, which is the world’s third largest wheat producer and biggest exporter.
Meanwhile, the dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.46% to hit 75.66, after earlier dropping to a one-week low of 75.58.
A weaker dollar boosts the appeal of U.S. crops to overseas buyers and makes commodities more attractive as an alternative investment.
Elsewhere, corn for July delivery added 0.57% to trade at USD7.4662 a bushel, while soybeans for July delivery gained 0.7% to trade at USD13.8675 a bushel during European morning trade.
ForexPros.com
