Exports Lift Wheat Prices

Wheat prices jumped 2.1%, lifted by higher-than-expected U.S. export sales and concerns that dry weather is hurting a portion of the nation’s crop.

U.S. grain exporters booked orders for 952,600 metric tons of wheat during the week that ended May 16, the U.S. Department of Agriculture said in a report Thursday. That exceeded analysts’ expectations of 400,000 to 700,000 metric tons.

Wheat futures also were helped by concerns about the health of wheat crops in the southern U.S. plains. Persistent dryness and freeze damage this spring in parts of Kansas and Oklahoma have reduced expected yields, according to the USDA. Much of the Great Plains continues to face severe drought, while dryness has eased in much of the nation’s Farm Belt since last year’s record U.S. drought.

Wheat futures for July delivery rose 14.75 cents to settle at $7.0325 a bushel at the Chicago Board of Trade, a one-week high.

The USDA’s export report was welcome news for traders, because it showed that recent declines in U.S. wheat prices have stimulated demand for the crop from foreign buyers, said John Kleist, senior analyst with brokerage Ebottrading.com in Lakemoor, Ill.

Tepid export demand and lower corn prices have weighed on U.S. wheat futures this year. Wheat and corn often trade in tandem, because both are used in animal feed.

U.S. soybean futures hit an eight-month high, supported by a strong weekly export sales report and concerns domestic supplies will tighten further amid robust demand. Soybeans for July delivery rose 5.25 cents, or 0.4%, to $14.995 a bushel.

The USDA reported net weekly soybean export sales of one million metric tons, higher than analysts’ expectations of between 400,000 and 800,000 metric tons.

Soybean stockpiles are tight after the drought last year reduced U.S. soybean output. Soybean processors are expected to import supplies from South America this summer to meet demand from customers because domestic stockpiles will be unusually tight until this fall’s U.S. harvest, analysts said.

“U.S. soybean domestic and export demand is still running at unsustainable levels,” said Dave Marshall, grain marketing adviser for agricultural-advisory firm TCFG LLC in Nashville, Ill.

Corn futures rose, climbing alongside wheat amid signs of solid domestic demand for the grain. Corn for July delivery gained 3.5 cents, or 0.5%, to $6.62 a bushel.

Write to Andrew Johnson Jr. at andrew.johnson