Canola was also lifted by speculation that it may benefit from new biofuel policies and by drought conditions in Western Canada.
Wheat futures broke out of a three-year bear market as global drought conditions worsened. Major wheat-producing areas like Europe, Russia, Western Canada and parts of the U.S. reported drought and excessive rain that raised quality concerns. Krasnodar, a key Russian grain region, declared a drought emergency.
In the U.S., heavy rains in Kansas and Oklahoma delayed wheat harvest and raised fears of sprouting and quality losses.
Speculative funds remain heavily short on wheat contracts, which may lead to short-cover rallies. Combined fund positions are near record short, indicating room for upward movement as harvest progresses, and weather remains uncertain.
Western Canada's crop prospects are threatened by continued dry conditions, especially in Manitoba. While rain is forecasted, many farmers are still waiting for enough moisture. Canola futures could rise to $800 - 850 if rains fail to meet expectations.
The Iran-Israel conflict and threats to close the Strait of Hormuz have driven up oil prices, adding broader inflationary pressure. About 20% of global oil and 15% of LNG pass through this crucial route.
Meanwhile, the U.S. Federal Reserve kept interest rates steady, with possible rate cuts delayed to September. Despite global tensions, strong tech stocks are supporting equity markets.
For daily information and updates on agriculture commodity marketing and price risk management for North American farmers, producers, and agribusiness visit things; Farms.com Risk Management Website to subscribe to the program.
Podcast lover who already has a YouTube.com account? To receive notifications when the Ag Commodity Corner+ Podcast is posted each week, be sure to Subscribe to the Farms.com channel, and ensure you have and ensure you have "All" selected. This way you will be notified whenever we post a new video. But remember, you have to be logged in to receive the notifications on YouTube.