Forex Pros – Wheat futures were up for the first time in three days on Thursday, rebounding from a two-week low as a combination of ongoing concerns over U.S. crop conditions and a broadly weaker U.S. dollar boosted prices.
On the Chicago Mercantile Exchange, wheat futures for July delivery traded at USD7.6812 a bushel during European morning trade, jumping 1.32%.
It earlier rose to a daily high of USD7.6988 a bushel.
Wheat prices tumbled nearly 7.5% over the past three sessions after Russia announced that it would let a ban on wheat exports expire on July 1.
The sharp price drop triggered some bargain-buying from traders reluctant to bet that prices would fall further amid lingering concerns over U.S. wheat crops.
The U.S. Department of Agriculture said in a report on Tuesday that approximately 44% of U.S. winter-wheat crops were in ‘poor’ or ‘very poor’ condition as of May 29, the worst reading for this time of year since 1996.
The report showed that 33% of the U.S. winter-wheat crop was rated “good” to “excellent” significantly lower than the five-year average of 65% for this time of year.
Plantings of U.S. spring-wheat was 68% complete as of last week, compared with 94% a year earlier and an average of 95% for the past five years, fuelling speculation that U.S. farmers may take insurance instead of continuing with planting efforts.
Spring wheat crop in North Dakota, the nation’s largest producer, was only 55% planted, versus the five-year average of 93%.
Weakness in the U.S. dollar also contributed to gains. The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.67% to trade at 74.39, after earlier dropping to a one-month low of 74.29.
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 shed 0.12% to trade at USD7.58 a bushel, while soybeans for July delivery added 0.13% to trade at USD13.9150 a bushel during European morning trade.
ForexPros.com
