Weather woes pushes wheat price

Wheat futures prices have surged to their highest level since January, in reaction to ongoing concerns about the United States crop.

Wet weather in the US growing regions has prompted speculative funds to close short positions on their Chicago Board of Trade futures.

While these funds were previously expecting a fall in wheat prices, excessive rain on the ripe US crop has prompted concerns about protein levels and sprouted grains.

The speculative funds had to buy futures to close those short positions, leading wheat futures prices to rally to a six-month high.

According to Profarmer, CBOT December 2015 futures were up by 27.50USc/bushel to 576USc/bushel, equivalent to around US$10 (A$13) to $11 a tonne.

Profarmer chief analyst Hannah Janson said additional concerns about the northern hemisphere crop included dry conditions in Canada, which had affected development.

In Europe, ongoing dry conditions, particularly in France, have continued to hamper the outlook for crops in that region.

Ms Janson said many of the areas currently affected by weather produced milling-quality wheat.

"While there is likely to still be enough wheat to feed the world this year, there is uncertainty as to whether or not there will be enough milling-quality wheat," Ms Jansen said.

"This is particularly of concern given production of milling quality wheat was also impacted by weather last season."

Ms Janson said it was difficult to judge whether the futures rally would be sustained, given much of the momentum was being driven by the speculative funds.