Wheat hits near 4-month top on US weather woes

SINGAPORE (Reuters): Chicago wheat rose for a fourth consecutive session on Monday to its highest since early October with prices buoyed by concerns over dry weather curbing US winter crop output.

Soybeans rose 1.2%, recouping last session’s decline on forecasts of continued dryness in Argentina’s oilseed belt, while corn rose for a second session to its highest since early December, supported by strong demand.

There is additional support for the commodity markets stemming from a weaker dollar, which makes greenback-priced goods cheaper for importers holding other currencies.

“The US still has a lot of wheat to move so prices can ill afford to overshoot the margin the greenback has provided,” said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.

“That does not prevent an overshoot happening for a brief period at least. Investors are heavily short wheat futures.”

The most-active wheat contract on the Chicago Board Of Trade rose 1.4% to $4.47-1/4 a bushel by 0314 GMT, touching its highest since Oct. 4. 

Soybeans added 1.2% to $9.97-1/2 a bushel, having closed down 0.7% on Friday. 

Corn gained 0.5% to $3.58-1/4 a bushel. Earlier in the session corn hits its highest since Dec. 4 at $3.58-1/2.

Wheat has drawn support from dry weather plaguing the US Plains, although a wetter weather pattern could begin to replenish moisture in the south-central parts of the region. 

Soybeans are firm as dry weather also threatens production in Argentina. But big harvests in Brazil and the United States, the world’s top two soybean exporters, may offset crop losses in Argentina, traders said. 

Global supplies are ample, with the US Department of Agriculture (USDA) projecting world soybean inventories at an all-time high at the end of the 2017/18 marketing year.

Private exporters struck deals to sell 125,000 tons of US corn to unknown destinations, the USDA said on Friday.