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Wheat futures are trading up Monday morning, lifted by higher corn prices and worries about reduced wheat harvests in key overseas regions.
In electronic trading, Chicago Board of Trade futures for September delivery are up 16 3/4 cents or 1.9% at $9.14 3/4 a bushel. Kansas City Board of Trade September wheat is up 13 3/4 cents or 1.5% at $9.19 3/4 a bushel. MGEX September wheat is up 9 3/4 cents or 1.0% at $9.81 3/4 a bushel.
Corn futures are trading higher Monday morning on renewed concerns that the Midwest drought could intensify, cutting further yield potential from the corn crop. That is boosting wheat futures as well since higher corn prices could boost demand for wheat as a substitute in animal feed.
Corn has been the main driver of wheat prices for weeks and is likely to remain so, analysts say.
“Speculative buying is supporting all grain contracts this morning. This is mostly weather related, as weekend rains were less than expected on a whole for the Corn Belt,” said Karl Setzer, analyst with MaxYield Cooperative in West Bend, Iowa.
Wheat futures prices have also benefited this summer from dry weather in other major wheat-exporting nations, including Australia and Russia.
Traders continue to focus on weather in the Black Sea region. Continued dryness in Russia’s spring-wheat region threatens to further reduce that crop’s potential, and traders are secondarily watching to see if monsoon rains in India pick up to support crop development there, said Larry Glenn, a broker at Frontier Ag, a commodities brokerage in Kansas.
Wheat’s gains could be limited by the potential for a large spring-wheat harvest in the U.S. The harvest began early this year and a crop tour last week estimated the spring-wheat crop in North Dakota is likely to yield 44.9 bushels an acre this year, above the 41.5 bushels an acre that it predicted last year.
Traders are waiting to see more initial yield reports from the harvest to gauge its likely size.
Traders will watch for the U.S. Department of Agriculture to release its weekly crop-progress report Monday at 4 p.m. EDT. The report will include updated condition ratings for the spring-wheat crop and the percentage of the crop that has been harvested so far.
- Owen Fletcher at Dow Jones.