Wheat Futures Soar on Drought Worries

Drought conditions pushed spring wheat futures past $7 a bushel for the first time in almost three years as a six-week rally resumed and spilled over into Chicago contracts.

Recent rain has come too late to save much of crop in the northern Plains in a move some analysts said could trigger "ration pricing" and drive futures toward $8 as millers seek high-quality grain.

The September contract ended 22 cents higher at $7.09 a bushel on the Minneapolis Grain Exchange, the biggest mover in a grain complex focused on Friday's slew of planting and stocks data from the U.S. Department of Agriculture. Wheat futures have gained around 35% since the rally started in early May.

Hard red winter wheat contracts at the Chicago Board of Trade gained from the soft grain's advance and the July contract gained 4 cents, or 0.9%, to $4.57 1/4. Soybean futures rose 2 3/4 cents, or 0.3%, to $9.14 and corn settled down 2 1/2 cents, or 0.7%, at $3.56 3/4.

With crop conditions broadly steady in the latest USDA update, traders have focused on weather events, notably mild weather and rains across parts of the Midwest and the potential for a return to very high temperatures during the crucial July growing season.

Analysts expect a slight reduction to corn acres and an increase to soybean plantings when the USDA reports Friday, alongside an increase in corn and bean ending stocks.

Separately, CBOT operator CME Group Inc. said it would launch an Australian wheat futures contract on July 24, expanding competition with ASX Ltd and expanding its complex following entry to the European market last year.

Write to Doug Cameron at doug.cameron@wsj.com

(END) Dow Jones Newswires

June 28, 2017 15:55 ET (19:55 GMT)