GRAINS-Wheat at two-month peak on U.S. weather worries

By Christopher Walljasper

-Chicago wheat up for fifth session

-USDA report shows further decline in spring wheat conditions

-Corn rises as U.S. crop rating misses consensus (New throughout; Updates byline, dateline previously PARIS/CANBERRA)

CHICAGO, July 20 (Reuters) – Chicago wheat futures climbed on Tuesday to a two-month peak after official data underscored poor conditions for drought-hit U.S. spring wheat.

Chicago corn gained, as a lower-than-expected weekly crop rating focused attention back to dry conditions in parts of the Midwest.

Golden ears of wheat against the blue sky on a cloudy day. Close-up photo in summer. Behind one ear there are several one-dollar bills

Soybeans rebounded after being pressured by falling crude oil prices on Monday, underpinned by warm and dry weather forecast across the U.S. Midwest ahead of the oilseed’s key summer growth period.

The most active wheat futures on the Chicago Board of Trade were up 8-1/2 cents at $7.06-1/4 per bushel at 11:18 a.m. (1718 GMT), having earlier touched their highest level since May 18 at $7.18.

CBOT corn added 16 cents to $5.68-1/4 per bushel, while soybeans gained 24-1/4 cents to $13.97.

The U.S. Department of Agriculture (USDA), in a report released after Monday’s market close, rated 11% of U.S. spring wheat as good or excellent, down from 16% a week earlier and below analysts’ average estimate of 15%.

“That crop’s just being torn apart,” said John Zanker, market analyst at Risk Management Commodities.

The USDA last week projected that U.S. spring wheat production would shrink to a 33-year low.

Global production concerns also supported wheat prices, with Kazakhstan limiting exports of barley, wheat and rye because of drought, while Russian harvest estimates dropped after disappointing yields.

U.S. corn and soybean conditions have weathered recent dryness, but risk of damage remains high at a time when supply is in sharp focus.

“We need a big crop,” said Karl Setzer, commodity risk analyst with Agrivisor, noting that even a small reduction in corn production could mean tight stocks. “Pressure on the crops is giving us some price support.”

The USDA left unchanged its good/excellent score for U.S. corn at 65%, short of an analyst consensus of 66%. It raised the soybean rating by 1 percentage point to 60%, in line with expectations. (Reporting by Christopher Walljasper; Additional reporting by Gus Trompiz in Paris and Colin Packham in Canberra Editing by Paul Simao)

Source: GRAINS-Wheat at two-month peak on U.S. weather worries | Reuters

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