U.S. wheat futures finished higher, with traders buying back previously sold wheat positions as concerns increase about spring wheat production in the northern Plains.
An annual spring-wheat tour that began Tuesday in North Dakota estimated yields will drop from last year, sparked fear that yield and production will not meet expectations.
Some people were just caught off guard by the results of the first day of the crop tour, said Terry Reilly of Citigroup in Chicago.
The hard red spring wheat crop in central North Dakota on Wednesday showed signs of lagging behind last year's yields, following a trend set on the first day of the state's annual crop tour.
A group of participants on the tour, sponsored by the Wheat Quality Council, estimated the average yield for five fields inspected in McLean and Sheridan counties at 42.6 bushels an acre. The same route last year had an estimated yield of 46.5 bushels an acre after a full day of inspections.
The spring wheat crop issues provided support to offset concerns about foreign demand, as the U.S. faces increased competition for export business from Russia. The market also shrugged off pressure from a higher U.S. dollar. The higher dollar makes U.S. supplies more expensive to foreign importers.
The strength of the market was surprising, as lower spring wheat yields were expected, said Shawn McCambridge, grains analyst with Jeffries/Bache in Chicago. The advances seem to be more a function of end of month positioning than a fundamental change in the market, he added.
Meanwhile, traders said the unwinding of short wheat/long corn spreads helped boost prices as well.
U.S. corn futures end higher on spillover support from a rally in the wheat market. Wheat influences corn because both grains are used for livestock.
U.S. soybean futures stumbled Wednesday, with selling generated by an absence of a new weather threat for crops and jitters about the government's inability to hammer out a debt-ceiling agreement. Traders took a cautious approach awaiting clear signals on weather and decisions on the U.S. debt ceiling, analysts said.
CBOT December corn end up 0.7% at $6.91 1/2 a bushel. CBOT Sept wheat end up 1.5% at $7.04 3/4, KCBT September wheat rose 1% to $7.88 1/4 and MGEX September wheat end up 1.4% to $8.51. CBOT November soybeans end down 0.6% at $13.80 1/2.
CBOT December soymeal end down 1.5% at $363.60/short ton, and December soyoil finish down 0.3% at 57.31 cents/pound.
U.S. rough rice futures end sharply lower, as jitters about the government's inability to hammer out a debt-ceiling agreement caused market participants to sell some risky investments. CBOT September rice dropped 41 1/2 cents, or 2.4%, to $16.79 1/2 per hundredweight.
Ethanol for December delivery dropped 0.3% to $2.566 per gallon. Oats for September delivery finish down 0.2% at $3.55 1/2 a bushel.
--Mark Peters contributed to this article