Wheat gains on rainfall concerns

Wheat was boosted by weather concerns as the remnants of Hurricane Patricia hit parts of the Great Plains area in the US, but left other wheat-growing areas parched.

Flooding threatened to wash away seeded areas including Arkansas and Louisiana, while other parts of Texas, which were in need of rain, only received a sprinkling, said brokers.

“Excessive rainfall threatened to wash away the planted seeds, but other areas were left dry,” said Michael McDougall at Société Générale in New York.

Wheat prices were lifted by continued dryness in leading wheat growing areas around the globe. There were concerns that farmers in Ukraine would have to cut planting areas for winter wheat, while parts of Australia also suffered a lack of rain.

According to Commodity Weather Group, parts of Russia were covered by rainfall over the weekend, but colder temperatures this week could limit growth that had just received moisture.

The consultancy added that dryness in eastern Ukraine and the central region of Russia, which accounts for 40 per cent of the wheat belt, would make the areas particularly vulnerable to cold weather.

CBOT December wheat rallied more than 3.5 per cent to $5.08 a bushel, as funds with bearish bets rushed to cover their positions.

Hard red wheat traded in Kansas rose 3.5 per cent to $4.91¾, supported by slow farmer sales, while European wheat traded in Paris rose 1 per cent to €187 a tonne.

The stronger wheat price led corn higher, with CBOT December corn up 1.4 per cent to $3.85 a bushel.