Wheat futures climb to 10-week high on U.S. crop fears

Forexpros – Wheat futures were up for a second day on Monday, climbing to a ten-week high as adverse weather in key U.S. wheat growing regions added to worries over deteriorating crop conditions in the U.S.

Chicago Mercantile Exchange, wheat futures for September delivery traded at USD7.3925 a bushel during European morning trade, jumping 1.05%.

It earlier rose as much as 1.3% to trade at USD7.4138 a bushel, the highest price since June 14.

Industry weather group Telvent DTN said in a report over the weekend that wheat-growing regions in southern Kansas, Oklahoma and Texas will be mostly dry through the end of August, according to the firm’s six-to-ten- day forecast.

The weather group expected only “a few light showers” and temperatures “above to well-above normal” in the southern Great Plans during the period.

According to the U.S. Department of Agriculture, nearly 13% of U.S. spring-wheat was harvested as of August 14, significantly below the five year average of 39% for this time of year and down from 31% during the same week a year earlier.

Kansas is the second largest wheat-growing state in the U.S. while Texas is the fifth-largest. The U.S. is the world’s biggest exporter of the grain.

Meanwhile, the National Bank of Australia lowered its forecast for Australian wheat production in the 2011-12 marketing season beginning October 1 to 21.8 million metric tons, down 12% from a previous estimate, as dry weather in the eastern part of the country was expected to lower yields.

Australia is the world’s fourth largest wheat exporter. Crop losses in Australia could mean increased demand for U.S. supplies.

Elsewhere on the Chicago Mercantile Exchange, corn for September delivery rose 0.76% to trade at USD7.1588 a bushel, while soybeans for September delivery advanced 0.78% to trade at USD13.7013 a bushel.

Later in the day, the U.S. Department of Agriculture was to publish its weekly crop progress report, which would provide an indication on how U.S. crops fared over the past week. 

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