July 9, 2010
CBOT wheat futures extend longest winning streak since mid-November
Chicago wheat futures extended gains Thursday (Jul 8) for six straight sessions; soy and corn both surged on mounting concerns over the poor weather in Europe and Russia.
September wheat surged 18.0 cents, or 3.4%, to US$5.485 per bushel, the price earlier touched US$5.495 dollars a bushel, the highest level since January 12. December corn climbed 7.0 cents, or 1.8%, to US$3.9625 dollars per bushel, earlier the price reached US$3.975 dollars per bushel, the highest level for the most-active contract since January 12. November soy rose 13.5 cents, or 1.4%, to US9.46 dollars per bushel.
Traders noted that unfavorable weather conditions have become the major factor behind the recent strong rally of grain futures. The ongoing problems of drought have intensified in Russia and Black Sea region, hampering crop yields. Moreover, the heavy rains in Ukraine has slowed wheat harvest and lowered gluten levels in wheat. Meanwhile, crops in Canada were hit by rain, hail and tornadoes last week, according to Canadian Wheat Board.
"Right now we're having wheat production problems in Canada, Europe, Russia, and Kazakhstan, so those prices look to be well above five dollars now, getting to US$5.50, up about 90 cents in one week's time, an incredible reversal. All of the large funds and traders, who had been short these markets have turned on a dime, and turned to the long side of the markets," according to Frank Lesh with the Futurepath Trading in Chicago.
