CHICAGO, April 24 (Reuters) – U.S. wheat futures jumped more than 2 percent on Thursday on concerns about dry conditions in the U.S. Plains winter wheat belt and some key production areas of western Europe as well as worries about tensions in eastern Ukraine.
Soybeans were narrowly mixed amid uncertainty over demand from top importer China. Employees of a trading unit of Marubeni Corp in China have been detained over allegations of tax evasion on soybean imports.
Corn futures firmed, adding to a sharp rally this week as the market awaited further clues about planting progress, with some spillover support from surging wheat.
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Expected rain in the U.S. Plains fueled a drop in wheat prices on Monday, but traders said showers this week have missed some very dry regions in the southern Plains.
“I don’t think that the wheat market is convinced that the rains in Texas and Oklahoma are doing the job, and we’re getting worries about dryness creeping into western Europe, particularly France,” said Sterling Smith, an analyst with Citigroup, citing the European Union’s top grain producer.
Tensions in Ukraine on Thursday also showed the continued risk of disruption to the Black Sea grain export zone.
Ukrainian forces killed up to five pro-Moscow separatists in the east of the country, the Interior Ministry said, as Russian President Vladimir Putin warned of “consequences” if Kiev used the army against its own people.
“That’s keeping the speculative shorts very quiet and might even turn a few of them into buyers,” Smith said.
Chicago Board of Trade May soft red winter wheat jumped 16 cents, or 2.4 percent, to a one-week high of $6.92-1/2 by 10:06 a.m. CDT (1506 GMT). Buying accelerated as the contract breached technical resistance around its 20-day moving average of about $6.81.
The May hard red winter wheat contract added 18 cents, or 2.4 percent, to $7.63-3/4 per bushel.
CBOT May soybeans gained 2 cents to $14.70-1/2 per bushel after earlier hitting a 1-1/2-week low.
Three employees at one of Marubeni’s grain trading units in China have been detained, Chinese customs officials said, a move prompted by allegations of tax evasion on soybean imports. The detentions could add to recent pressure on soybean prices after a wave of soybean cargo defaults in China.
The soybean market has been dampened by talk that tight U.S. supplies may be boosted by imports into the United States in a knock-on effect from lower demand from China.
CBOT May corn futures gained 2-1/2 cents, or 0.5 percent, to a one-week high of $5.06 a bushel after adding 3 percent in the previous two sessions.
Cold weather and rain have hampered the start of the spring planting season for corn, and forecasts for more showers since Wednesday could continue to slow progress.
