May 22, 2018 / 5:31 PM / 7 months ago

GRAINS-Wheat rallies on U.S. Plains dryness, technical buying

* U.S. winter wheat conditions a concern amid drought

* Soybeans little changed as market awaits China buying (New throughout, updates prices, adds quote, changes dateline; previous HAMBURG)

By Karl Plume

CHICAGO, May 22 (Reuters) - U.S. wheat futures surged more than 3 percent on Tuesday on technical buying and crop production concerns due to dry weather in the U.S. Plains wheat belt and other major production areas around the globe.

Corn futures advanced on spillover support from wheat, while soybeans were little changed.

Wheat recovered all of its prior-session losses that stemmed from rain in the U.S. Plains, where a large share of the milling wheat crop has suffered under a severe drought this year.

The U.S. Department of Agriculture said just 36 percent of the U.S. winter wheat crop was in good-to-excellent shape as of Sunday, compared with 52 percent at the same point last year.

“We got some rain, but the market is worried that maybe it’s a little bit too late to have an impact at this point,” said Ted Seifried, analyst with Zaner Ag Hedge.

Chicago Board of Trade July soft red winter wheat was up 18-1/4 cents, or 3.6 percent, at $5.25-1/2 a bushel at 12:15 p.m. CDT (1715 GMT), while K.C. July hard red winter wheat was up 20-1/2 cents, or 3.9 percent, at $5.47 a bushel.

Both were above all key moving averages. Both also dropped below Monday’s low before rising above Monday’s high, a bullish technical indicator.

“Right now we’re working on an outside reversal higher in Chicago and Kansas City wheat. If we close above yesterday’s high, that’s a pretty strong buy signal for the technical guys,” Seifried said.

Soybeans slipped from session highs as follow-through buying from Monday’s steep rally faded. The market was weighed down by a bumper harvest in Brazil and a lack of new U.S. soybean purchases by China following a thaw in trade tensions over the weekend.

Better-than-expected U.S. soybean planting progress also capped the market after the USDA said 56 percent of the crop had been seeded as of Sunday, well ahead of the five-year average of 44 percent.

Corn planting was 81 percent completed, in line with the average pace, USDA said.

CBOT July soybeans were up 1 cent at $10.26-1/4 a bushel. The contract encountered chart resistance at its 50-day moving average and failed to hold support at its 100-day moving average.

CBOT July corn added 2-1/4 cents to $4.05 a bushel. (Additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore; editing by Alexandra Hudson and Dan Grebler)

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