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U.S. wheat futures rose about 3% to a two-week closing high Tuesday, buoyed by concerns about unfavorable weather conditions for crops growing in the U.S. Great Plains.
March wheat futures climbed 24 3/4 cents, or 2.9%, to $8.88 1/2 a bushel at the Chicago Board of Trade. Kansas City Board of Trade March wheat rose 31 1/2 cents, or 3.5%, to $9.33 3/4 a bushel. MGEX March wheat finished up 22 1/2 cents, or 2.4%, at $9.50 1/2 a bushel.
Wheat enjoyed support Tuesday from concerns about dry weather in the central U.S. and hopes that export demand for the U.S. crop is due to pick up.
"The concern is it's very dry and crops in the Plains are under stress," said Sid Love, an analyst with advisory firm Kropf & Love Consulting in Overland Park, Kan.
A federal government report Monday said just 33% of the nation's winter-wheat crop was rated in "good" or "excellent" condition--the lowest level for this time of year since the Department of Agriculture started releasing the data in 1986. Last year at this time, the figure was 52%.
The USDA's report revealed that dryness issues following this past summer's severe U.S. drought continue to afflict hard red winter crops from Oklahoma to Texas. Winter wheat is planted in the fall, goes dormant in the winter and is harvested in the spring and summer.
The wheat crop will soon head into dormancy under dry conditions, a feature that will require ample winter snow or a wet spring to offset the dry start to the growing season.
"Traders are adding premium in case it doesn't rain," Mr. Love said.
Wheat futures were also buoyed by hopes that the U.S. is closer to securing export business, as cheaper supplies from the competing Black Sea region dwindle and quality issues arise for crops from Europe and Australia.
U.S. soybean futures settled higher for the third straight session, rallying on concerns about dry conditions for some of Brazil's newly planted crops. Some traders also think soybean futures were oversold after falling sharply in recent weeks. Traders note that soybean prices are underpinned by healthy demand for the oilseed and tight global supplies.
Chicago Board of Trade soybeans for January delivery finished up 24 1/2 cents, or 1.7%, at $14.49 1/4.
Corn traded higher Tuesday, buoyed by the rally in wheat prices and underlying technical support. CBOT March corn finished up 12 3/4 cents, or 1.7%, to $7.64, the highest closing price in two weeks.
--Owen Fletcher contributed to this article.Write to Andrew Johnson Jr. at email@example.comSubscribe to WSJ: http://online.wsj.com?mod=djnwires(END) Dow Jones NewswiresNovember 27, 2012 15:41 ET (20:41 GMT)DJ U.S. GRAIN AND SOY REVIEW: Wheat Jumps Amid Crop Worries->copyrightSign up for our Market Email Alerts!