Forex Pros – Wheat futures were up for a second day on Monday, as lingering fears over deteriorating crop conditions in the U.S. boosted prices, which were also supported by a broadly weaker U.S. dollar.
On the Chicago Mercantile Exchange, wheat futures for July delivery traded at USD7.7588 a bushel during European morning trade, surging 2.78%.
It earlier rose by as much as 3.2% to USD7.7900 a bushel, the highest price since May 5.
The U.S. Wheat Quality Council, an industry group projected that yields from the winter-wheat harvest in Kansas would drop to 256.7 million bushels, down 28% from last season’s harvest of 360 million bushels.
Total U.S. wheat supplies were expected to total 1.441 billion bushels in the 2011-12 marketing season, down 3% from a year earlier, the group said in a report published on Sunday.
According to the U.S. Department of Agriculture, nearly 45% of Kansas’ wheat crop was in ‘poor’ or ‘very poor’ conditions as of May 1.
Kansas is the largest wheat-growing state in the U.S., which is the world’s biggest exporter of the grain.
Meanwhile, weakness in the dollar had also contributed to wheat’s strength. The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.63% to hit 74.69.
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 0.45% to trade at USD6.9025 a bushel, while soybeans for July delivery rose 0.21% to trade at USD13.3238 a bushel during European morning trade.
ForexPros.com
