U.S. wheat futures led a rally in grain and soybean futures Wednesday, driven by world crop weather and production concerns.

Chicago Board of Trade July wheat climbed 16 3/4 cents, or 2.2%, to $7.96 1/2 a bushel; Kansas City Board of Trade July gained 16 3/4 cents, or 1.8%, to $9.28 3/4; and Minneapolis Grain Exchange July soared 31 1/4 cents, or 3.2%, to $10.20.

Renewed global supply worries served as the catalyst for advances in wheat futures, as traders priced in the risk of poor planting weather in the U.S. spring wheat belt and droughts in Western Europe reducing world wheat supplies, said Mike Zuzolo, president Global Commodity Analytics & Consulting.

Grain users are keeping a close eye on the weather as dryness has plagued key growing areas of the southern U.S. Plains and Europe this season. They are on edge about threats to output after weather disasters, including a historic drought in Russia, slashed global output last year. Wheat prices rallied last year on Russia's drought and reached 2 1/2-year highs in February on a surge in demand. They have since pulled back 12%.

Europe is a major exporter of grain and competes with the U.S. for business on the global market. Crop losses in Europe could mean increased demand for U.S. grain.

Yet traders are keeping an eye on developments in the Black Sea region also, as Russia and Ukraine could take business away from the U.S. as they recover from last year's drought.

Meanwhile, wet conditions in the U.S. northern plains continue to limit spring wheat plantings, an ongoing issue reflected in the over 3% rise in MGE spring wheat futures Wednesday. Further support was received from outside markets, with a recovery from earlier declines in energy and metal futures attracting investor buying.

Investors continue to favor grain futures, as there are so many potential crop problems this year, with dryness in France and Germany, and acreage uncertainties in the U.S. leaving a lot of issues to rectify before grain markets stabilize, said Dan Basse, president of AgResource Co., an agriculture advisory firm in Chicago.

U.S. corn futures finished higher as persistent planting delays raise concerns that farmers won't plant as many acres as intended. CBOT July corn jumped 9 cents, or 1.2%, to $7.42 1/4 a bushel.

U.S. soybean futures ended higher, garnering support from planting concerns, as slowed seeding progress in the eastern Midwest and northern Plains raise issues of potential acreage and yield losses. CBOT July soy ended up 0.3% at $13.77 a bushel.

Other Markets

CBOT soyoil ended 0.8% higher at 57.96 cents a pound, and July soymeal dropped 0.3% to $358.30 per short ton. U.S. rice futures advanced with prices for other grains. CBOT July rice rose 4 1/2 cents to $15.17 1/2 per hundredweight.

U.S. oat futures closed higher on concerns about rains preventing planting in the northern U.S. Plains and Canada and the potential for crop damage due to frost. CBOT July oats rose 9 cents, or 2.5%, to $3.69 a bushel.

Ethanol futures strengthened with corn, as the July contract gained 2.4 cents, or 0.9%, to $2.635 per gallon. Federal data issued Wednesday showed U.S. ethanol production increased 0.2% last week to 902,000 barrels a day.