CHICAGO (Reuters) - U.S. wheat futures rallied on Friday, with the benchmark Chicago Board of Trade soft red winter wheat contract surging 3 percent on forecasts for dry conditions that could further stress an already damaged crop.
The weather outlook also threatened to slow planting progress in the U.S. Midwest, which was supportive of corn and soybean futures.
“Heavy rainfall across portions of the northern U.S. Plains and the western Midwest will further delay spring plantings, while unfavorable dry anomalies persist in the southern U.S. Plains,” Thomson Reuters Weather Research said in a note.
Corn futures were up 1.6 percent following China’s move to drop its anti-dumping probe into imports of U.S. sorghum on Friday, beating a hasty retreat from a dispute that wreaked chaos across the global grain market and raised concerns about rising costs and financial damage at home.
The decision also boosted soybean futures amid hopes it signaled that a move to settle all ongoing trade disputes between Beijing and Washington would follow soon.
“The whole complex is being supported by the idea that China is showing some flexibility and talk of a potential grand bargain,” said Jim Gerlach, president of Indiana-based A/C Trading.
Chinese Vice Premier Liu He is in Washington for talks aimed at resolving trade tensions between the world’s two largest economies.
At 11:31 a.m. CDT (1631 GMT), CBOT July soft red winter wheat futures were up 15 cents at $5.12-1/2 a bushel. CBOT wheat has risen for four days in a row and was on track for a weekly gain of 3.1 percent.
CBOT July corn futures were 6-3/4 cents higher at $4.02.
CBOT July soybean futures were up 1/4 cent at $9.95-1/4 a bushel.
Strength in soybeans was tempered by a U.S. Agriculture Department announcement that unknown buyers canceled sales to buy 949,000 tonnes of soybeans.
Soybean futures have fallen 0.8 percent this week and were on track for their third straight weekly loss. Corn futures were up 1.4 percent this week.
Additional reporting by Naveen Thukral in Singapore and Nigel Hunt in London; Editing by Dale Hudson and Tom Brown