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Wheat firms for 2nd day as dry weather hits U.S. spring crop

Chicago wheat futures rose for a second straight session on Thursday, underpinned by a severe drought curbing yields of top quality U.S. spring wheat.

Corn and soybean futures edged lower.

“Dry weather is curbing U.S. spring wheat and that is supporting wheat prices globally including Australia where the market has climbed,” one Sydney-based grains broker said.

The most-active wheat contract on the Chicago Board of Trade (CBOT) was up 0.7% at $6.93-1/2 a bushel, as of 0238 GMT, adding to Wednesday’s 2.1% rally.

Corn lost 0.2% to $5.47-3/4 and soybeans slid 0.2% to $13.58-1/4 a bushel.

Spring wheat yields across the northwest quarter of North Dakota are well below average this year as severe heat and long stretches of dry weather sapped crop potential, scouts on an annual tour of the country’s top producing state said on Wednesday.

The tour estimated the average yield at 24.6 bushels per acre (bpa) on the second day of the three-day Wheat Quality Council tour, down from 40.8 bpa in 2019 and the five-year average of 42.4 bpa. The tour was cancelled last year because of the coronavirus pandemic.

The drought extends into South Dakota and Montana as well as portions of Canada.

Dry conditions affecting portions of the Midwest crop belt have lent support to corn and soybeans although forecasts for cooler temperatures next week and sluggish export demand for U.S. supplies are likely to keep a lid on prices.

In Brazil, freezing temperatures on Wednesday and Thursday will hit crops like corn and wheat, according to a warning issued to farmers by the government’s food supply and statistics agency Conab.

In Sao Paulo and Parana states, there is the risk of moderate and severe frosts and this could affect second corn that is in the grain-filling stage, as well as wheat that is in the flowering stage, Conab said late on Tuesday. Second corn is planted after soybeans are harvested in the same fields.

Corn and wheat in Mato Grosso do Sul could also be hit by frosts, though in fewer areas, Conab said.

Commodity funds were net buyers of CBOT wheat, soybean, corn and soyoil futures contracts on Wednesday, and net sellers of soymeal futures, traders said.
Source: Reuters (Reporting by Naveen Thukral; Editing by Subhranshu Sahu and Sherry Jacob-Phillips)

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