CHICAGO, June 8 (Reuters) – Chicago Board of Trade soybean futures jumped 3 percent to their highest in nearly two years on Wednesday as forecasts for hot temperatures to hit key growing U.S. regions stoked fears of damage to nascent crops, traders said.
Corn and wheat futures also rallied, putting them on track to extend a streak of positive closes to six sessions. Traders said the weather forecast also raised concerns about corn development while short-covering supported the gains in wheat.
Soybean futures peaked at their highest since July 1, 2014, receiving additional strength from another sale of U.S. supplies to China. The U.S. Department of Agriculture (USDA) has announced spot soybean sales for three days in a row, highlighting the problems that excessive rains have wreaked on
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“While weather is starting to be the big dog in the market, demand news is still in play due to uncertainty over the size of the crop in Argentina,” said Bryce Knorr, senior grain market analyst at Farm Futures.
Corn, which hit its highest since July 17, 2015, also stood to benefit from increased export demand.
At 10:18 a.m. CDT (1518 GMT), CBOT July soybean futures were up 35 cents at $11.76-1/4 a bushel. CBOT July corn was 6 cents higher at $4.33-3/4 a bushel.
“The real story in the near term is the heat,” said Tregg Cronin, market analyst for Halo Commodities in South Dakota. “If this pattern holds, it will become a major issue by mid-June.”
CBOT July soft red winter wheat futures were 9-3/4 cents higher at $5.18-3/4 a bushel. Prices for the most active contract peaked at their highest since Nov. 6.
A round of short-covering supported wheat futures as investors scrambled to unwind bearish bets they made amid talk of a global supply glut in the grain.
USDA said early on Wednesday that exporter booked deals to ship another 132,000 tonnes of soybeans to China during the 2015-16 crop year, the top buyer of the oilseed.
“This is supportive today as it shows robust Chinese soybean import demand is continuing despite concern about China’s economic slowdown,” said Frank Rijkers, agrifood economist at ABN AMRO Bank.
