Wheat futures rose Friday as concern about crop damage supported a rally in the grain.
The Commodity Weather Group said 20% of the winter wheat crop in the western U.S. Plains was at risk of damage as a cold snap this weekend brings snow to the region.
Widespread pessimism in commodity markets has weighed on wheat prices in recent weeks. But analysts say century-low winter wheat acreage, combined with extensive hedge-fund bets on lower prices, creates potential for near-term gains.
"The sheer size of short positions in Chicago leave us vulnerable to a sharp rally if [traders] get scared," said Arlan Suderman, chief commodities economist at brokerage INTL FCStone.
Concerns about wet weather in the Midwest also supported soft red wheat prices. MDA Weather Services forecasts heavy rain and some flooding across the region over the weekend.
"Most of that rain cannot be absorbed," said Dave Marshall, a farm-marketing adviser with First Choice Commodities in Nashville, Ill.
May Chicago wheat futures rose 1.2% to $4.18 1/2 a bushel at the Chicago Board of Trade, while May Kansas City wheat futures gained 1% to close at $4.24 3/4 a bushel.
Corn and soybean futures slumped on end-of-month positioning, with some traders closing their bets as May contracts reached the first notice date.
Much of the corn belt also will be hit by wet weather in the coming days, which could hold up farmers from planting this year's crop. Analysts expect as much as a third of it in the ground as of this Sunday, and say that drier weather next week should allow farmers to catch up from any weather delays.
CBOT May corn futures fall 1.1% to $3.58 a bushel. CBOT May soybeans close 0.1% lower at $9.45 1/4 a bushel.
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(END) Dow Jones Newswires
April 28, 2017 16:33 ET (20:33 GMT)