Chicago wheat futures jumped to a one-month peak Wednesday, extending a rebound from last week’s five-year lows as a sliding U.S. dollar and mounting worries over Northern Hemisphere harvests triggered aggressive short-covering by funds. The rally spilled into corn and soybeans, with analysts warning of historically tight global corn supplies and Argentine soy crop risks from flooding.
Why Wheat Is Leading the Charge
🌾 Production Fears:
- Russia/China crop damage reports circulated at the LME Asia conference.
- U.S. crop ratings unexpectedly declined this week (USDA).
📉 Short-Covering Spike: Funds scrambled to exit bearish bets after prices bottomed near $5/bushel last week.
💵 Dollar Effect: The weaker USD (after dovish Fed comments) made U.S. grains cheaper for importers.
Corn & Soybeans Join the Rally
🌽 Corn’s Tight Squeeze:
- New-crop stocks-to-use ratio projected at 2012 drought-era lows—when prices hit record highs.
- CBOT corn rose 1.4% to $4.61/bushel, a two-week high.
🌱 Soybeans’ Argentine Angst: - Heavy rains threaten soy yields in Argentina (top soymeal exporter).
- Prices gained 0.9% to $10.62/bushel.
Market Movers
📊 Price Action:
- CBOT Wheat (Wv1): Settled at 5.49−1/4/bushel∗∗(+3.25¢),afterpeakingat∗∗5.49−1/4/bushel∗∗(+3.25¢),afterpeakingat∗∗5.56 (highest since April 21).
- KC & Minneapolis Wheat: Outperformed on hard red winter crop concerns.
🔄 Fund Flows: “The market’s shifting from oversold to oversupply fears,” said Mike Zuzolo of Global Commodity Analytics.
What’s Next?
- Weather Watch: Any Russian/Chinese harvest downgrades could extend wheat’s rally.
- USDA Reports: Traders await June WASDE for revised supply forecasts.
- Fed Impact: If dollar weakness persists, U.S. grain exports may rebound.
Wheat Futures Rally to 1-Month High as Dollar Weakens, Global Crop Concerns Mount