CHICAGO, June 10 (Xinhua) -- Chicago Board of Trade (CBOT) grains futures closed higher over the trade week which ended June 9, as dry weather across key North American producing regions stoked concerns of potential production losses.
CBOT corn futures rallied to new highs and a continuation basis spot corn rests at an 11-month peak. A close eye is being kept on developing drought across the Northern Plains, and while the forecast through late June is mixed or uncertain across the heart of the corn belt.
Analysts' climate work suggests a warmer than previously expected summer lies ahead, and some 30-35 percent of the crop is at risk of declines in soil moisture over the next 2-3 weeks. This is the first real crop threat in several years.
Wheat futures ended sharply higher this week as drought intensifies across the Northern Plains, and as the world cash market fails to decline ahead of harvest.
The spring wheat balance sheet could get very tight and this will support winter wheat futures on breaks. Sourcing domestic supplies in Russia remains difficult amid new tax policies. Crop problems are mostly absent from Europe and Russia, so the U.S. market loses export demand.
Major world wheat exporter supplies are in decline and a post-harvest rally will be used to advance cash sales. Wheat's long term bear market ended in 2016 and a broad trading range is now expected throughout much of 2017.
Soybean futures finished the week with solid gains as warm and dry weather pushed funds to begin covering their significant short position. The June World Agricultural Supply and Demand Estimates did not offer any significant changes, with just a slight reduction in the old crop crush rate.
The market initially broke at the report release, but within minutes the focus was back to Central .U.S weather. Last week's Drought Monitor showed that seven percent of the total U.S. soybean crop was experiencing drought, most of which was located in the Northern Plains states.
The forecast has some rains scheduled for early next week, but not nearly enough to change declining soil moisture conditions. Across the Midwest, the extended forecast is showing the chance for light rains at mid-June, but stays warm and dry into late June.
The Commitment of Traders Report showed that as of Tuesday, funds had pressed their short position futures position to 101,752 contracts, but had increased their length in the options market. A soaking rain is needed across the Midwest, and analysts expect the market will continue to add premium until the Central U.S. weather pattern turns more favorable.
