Roundup: Weather woes lead to surge in CBOT futures over the week

CHICAGO, March 3 (Xinhua) -- Chicago Board of Trade (CBOT) grains futures closed higher over the trade week which ended on March 2, with wheat prices surging almost 8 percent over dryness in U.S. plains.

The most active corn contract for May delivery rose 10.75 cents weekly, or 2.87 percent, to 3.525 dollars per bushel. May wheat delivery soared 35.75 cents weekly, or 7.7 percent, to 5.00 dollars per bushel. May soybeans went up 23.5 cents weekly, or 2.24 percent, to 10.71 dollars per bushel.

Continuing dryness in the U.S. southern plains pushed wheat futures to seven-month highs. New crop ratings released by the U.S. Department of Agriculture (USDA) earlier this week referred to big problems in Kansas and Oklahoma particularly.

The USDA report confirmed damage to winter wheat crops from the dryness, with only 12 percent of Kansas' crop being rated in "good" or "excellent" condition.

Joe Vaclavik of Standard Grain described the ratings as "some of the worst in recent memory," maybe "record lows" in some instances.

Meanwhile, frigid temperatures across the European continent this week, which sparked worries that the winter-kill may also bring damage to wheat crops there, offered additional support to CBOT wheat prices.

Although profit-taking towards the end of this trade week pared some early gains, the wheat prices managed to stay above the five-dollar-per-bushel level.

However, some market analysts pointed out that the price surge was not driven by demand, so adverse weather will be needed in at least one more major exporting country to sustain the rally through summer.

Funds have continued to invest in the soybean market amid the ongoing Argentine drought and U.S. farmers have been reportedly big sellers on this rally. Soybean prices have been maintained above 10-dollar-per-bushel for three weeks.

The USDA's March report on world agricultural supply and demand is to be released in the coming week, and significant reduction to South American soybean production are expected. Some market observers keep bullish on soybeans, saying the next target may be near 11 dollars per bushel.

CBOT corn continued its rally as Argentine drought deepened. Better-than-expected export sales also supported the prices. With the dollar staying relatively weak, the U.S. corn is still the world' s cheapest feed grain.

But the talk of a possible trade war after President Donald Trump's announcement to levy high tariffs on steel and aluminum imports has led to fears that the U.S. agricultural commodities could be the potential target if other countries take retaliatory measures. Enditem