CBOT wheat futures firm as concerns over drought impact on crop yields mount

By P.J. Huffstutter

CHICAGO, May 1 (Reuters) - Chicago Board of Trade wheat futures ticked higher on Friday on spread trading, as concerns over drought damage to the U.S. hard red winter wheat crop had some investors hedging their bets ahead of a government crop progress report next week, market analysts said.

The wheat market continues to be underpinned by worries about drought threatening wheat yield prospects in the southern U.S. Plains, said traders, who are closely tracking the spread of dry conditions across the U.S. Plains that has damaged some crops. Earlier this week, the most-active contract Wv1 surged to a near two-year high.

"We could be going into a 2012 drought scenario for wheat that we had seen back then in the corn," said Mike Zuzolo, president of Global Commodity Analytics. "We have about 30 days of growth before the plant starts dying on us."

Meanwhile, global oil prices eased on Friday after hitting a four-year high of more than $126 a barrel earlier on Thursday on concerns the U.S.-Israeli war on Iran could lead to a protracted Middle East supply disruption that could inflict deeper damage on the global economy.

"Between the weather, what's happening in crude and the uncertainty in the markets, the trade is hunkering down a bit," Zuzolo said.

The most-traded wheat contract on the Chicago Board of Trade Wv1 was up 0.39% at $6.39-1/4 a bushel at 12:15 p.m. CDT (1715 GMT), and headed for a fourth straight weekly rise.

CBOT corn Cv1 was up 1.74% to $4.83 a bushel - even as several corn contracts for 2027 set new highs and December corn CZ26 cracked $5 per bushel. And soybeans Sv1 rose 0.67% to $12.03-1/2, crossing the $12 a bushel mark.

CBOT corn futures turned higher, supported by fears that a sharp rise in fertilizer costs due to the Iran war will crimp farm output over time, questions about planting progress and signs of steady corn export demand.

On Friday, the U.S. Department of Agriculture confirmed private sales of 148,240 metric tons of U.S. corn to undisclosed destinations, including 78,240 tons for delivery in the 2025/26 marketing year that began on September 1, 2025, and 70,000 tons for 2026/27 delivery.

Weather concerns were also at play in the corn market Monday, traders said. Some brokers and market analysts said that their farmer clients in central and eastern parts of the U.S. Corn Belt had not yet started planting, either because it had been too wet or too cold.

And CBOT soybean futures rose on a bear spread, even as the most-active July contract SN26 stayed inside Thursday's trading range. Soybean futures drew support as soyoil futures 0#BO: set contract highs across the board, buoyed by demand for biodiesel.

Crush margins also gave soybean futures a boost. The Chicago Board of Trade July SMSIN26-BON26-SN26 board crush, one indication of soy processors' profit margins, was last up 3 cents at $3.29 per bushel of soybeans.