Wheat Caps Biggest Weekly Gain in Month as U.S. Drought Worsens

Apr 17, 2014 4:41 pm ET

April 17 (Bloomberg) -- Wheat rose in Chicago, capping the biggest weekly gain in a month, on speculation that dry crop conditions will disrupt supplies in the U.S., the largest exporter.

More than 70 percent of Kansas, the largest winter-wheat grower, was in severe-to-exceptional drought as of April 15, double the amount at the start of the year, according to U.S. Drought Monitor data. Half of the High Plains wheat belt may see temperatures as high as 90 degrees Fahrenheit (32 Celsius) next week, Commodity Weather Group forecast today.

“Actual rain isn’t living up to forecasted rain,” Jim Gerlach, president of A/C Trading Co. in Fowler, Indiana, said in a telephone interview. “Moisture requirements are going to move up. I haven’t seen a soaker.”

Wheat futures for July delivery climbed 0.5 percent to close at $6.99 a bushel on the Chicago Board of Trade, the third gain in four sessions. The grain advanced 4.6 percent the week, the first gain this month and the most in five weeks. The market will be closed tomorrow for Good Friday.

Tensions between the Ukraine and Russia are also supporting wheat, Gerlach said. Russia is forecast to be the fifth-largest shipper this year, followed by Ukraine. Top diplomats from the two countries met today for the first time since clashes erupted in eastern Ukraine. The talks included the U.S. and European Union, and an accord was reached aimed at easing the conflict in the region.

Corn futures for July delivery declined 0.6 percent to $5.005 a bushel. Higher temperatures and less rain in southern and eastern U.S. planting areas will allow seeding to accelerate in the next two weeks, Commodity Weather Group said.

Soybean futures for July delivery fell 0.4 percent to $15.0225 a bushel, marking the first loss this week.