U.S. wheat futures surged Tuesday, ending higher on a variety of crop troubles and optimism about demand.
Soft red winter wheat for September delivery at the Chicago Board of Trade ended up 21 3/4 cents, or 3%, to $7.57 1/4 per bushel.
There are worries about various wheat crops, domestically and in Europe, analysts said. The spring wheat crop in the northern U.S. Plains has been hurt by a soggy growing season and slow harvest, and a weekly government report Monday showed the condition of the crop declined significantly.
Meanwhile, in the southern Plains, analysts are wondering how farmers will plant a hard red winter wheat crop, given a severe drought in many areas that has left dry, cracked soil unsuitable for cultivation.
Hard red winter wheat for September delivery at the Kansas City Board of Trade surged 19 1/2 cents to $8.41 per bushel Tuesday, while hard red spring wheat at the Minneapolis Grain Exchange climbed 7 cents to $9.50 1/4.
Analysts said the market is also getting support from soggy weather that is delaying harvest in Germany, fueling concern about that crop's quality.
Meanwhile, some traders and analysts are expecting demand to continue to grow as more wheat is used by livestock and poultry feeders as a replacement for corn, which is higher in some cash markets.
An Egyptian purchase of Russian wheat Tuesday was seen as negative for the market by some as Egypt bypassed U.S. wheat, but other traders and analysts note it was at a higher price, and said ultimately demand for U.S. wheat could grow.
"There's a lot of speculation that supplies will get tight enough that (Russia) will start cutting back on their shipments," said Tom Leffler, owner of Leffler Commodities, a Kansas brokerage.
Corn and soybean futures also gained Tuesday amid worries about the U.S. crop. Both were supported by the USDA's crop progress report Monday, which showed the crop is deteriorating.
Some traders and analysts are now talking about national corn yields below 150 bushels per acre, which would ensure supplies remain uncomfortably tight throughout next year. The USDA most recently projected a yield of 153 bushels per acre.
Commodity Weather Group, a private forecaster, on Tuesday projected a national yield of 148.7 bushels per acre, down from a prior estimate of 150.
CBOT September corn ended up 9 3/4 cents, to $7.30 1/4 per bushel. December corn set another contract high Tuesday, ending up 9 cents, to $7.43 1/2.
Soybeans' gains on the crop concerns were tempered somewhat by surprising rains in Iowa and Minnesota overnight, as well as rains Tuesday in Illinois, which has suffered from drought.
CBOT September soybeans ended up 13 cents, to $13.89 1/2 per bushel. September soymeal closed up 5.60, to $368.30 per short ton, and September soyoil ended up 0.02c, to 55.62 cents per pound.