Chicago wheat rediscovered its independence on Thursday, closing higher – and heading towards its best month for 37 years - even when its European peers, who had been leading the show, finished lower.

It started with what has become a typical opening in the wheat market, marked by "consumer shorts, panic, a rush [by shorts] for the doors", one UK trader told Agimoney.com.

And, indeed, wheat jumped once again in early deals, hitting fresh highs since 2008 in London and Paris, and a new 13-month high in Chicago, as fears mounted over exports from drought-struck Russia, the world's third biggest wheat exporting country last year.

"News continues to circulate that Russia will have to cut, or completely stop, exports this year," Allendale, the US broker, said.

'Void of significant topsoil moisture'

A forecast from World Weather's Drew Lerner illustrates why.

"A tremendous portion of western and south-central Russia and western portions of Kazakhstan are void of significant topsoil moisture and about half of the region is equally dry in the subsoil," he said.

"These areas that are dry throughout the soil column have the worst crop conditions, and some of this region has been in this condition most of July and in a part of late June."

'Less supportive view'

But only the US markets could hold on to positive ground. Paris wheat for November ended at E188.00 a tonne, down E1.25 on the day, and off nearly E6 a tonne from its intraday high.

Its London peer fared even worse, shedding £1.45 to £137.95 a tonne, after hitting £143.00 a tonne earlier.

It maybe that investors listened to Gleadell's advice that, with "global stocks of wheat remaining adequate, even with the expected 10-15m-tonnes lower world wheat crop, the long-term view remains less supportive , especially with better prospects in the southern hemisphere and the US."

Thoughts over the parched French crop have also stabilised, with Offre & Demande Agricole saying that the European Union's biggest wheat harvest would come in at 34.6m tonnes, lower than official estimates, but above that of many gloomy analysts.

Dynamic duo 

US wheat had three extra weapons on its side.

The first was the fall in the dollar, which lost a further 0.7% against a basket of currencies on Thursday, so making US exports more competitive.

Indeed, the second was upbeat weekly export sales data, which came in at 919,000 tonnes, more than double trade estimates. And this, remember, even as futures prices soared (although, as Darrell Holaday at Country Futures keeps reminding us, cash prices are decidedly weaker).

The third was prospects of further healthy exports ahead. The International Grains Council, in a report cutting its estimate for the world wheat harvest by 13m tonnes, raised its estimate for US exports by 1.9m tonnes.

The rationale was, as many investors are counting on, that with Black Sea exporters crippled, the US will revert to its historic position as the world's wheat banker.

It is also true that US wheat is looking much more competitive than it has been for much of the year, even at the closing price for the September contract of $6.27 ½ a bushel, up 2.0% on the day.

That's equivalent to about $230 a tonne, or less than E176 a tonne, well short of Paris prices.

Strong exports 

Once again, wheat lifted its Chicago peers, with corn ending 0.8% higher at $3.79 ¼ a bushel.

It also had support from firm weekly export sales, of 960,000 tonnes, and weather forecasts noting some risk of drier conditions in the southern Midwest and Mississippi Delta.

Furthermore, the IGC trimmed its estimate for world corn inventories, noting in part lower hopes for the US crop.

Export sales for soybeans were even stronger, at nearly 1.5m tonnes, some 500,000 tonnes ahead of market expectations.

With basis levels firm too, and some technical goings on in the run down to expiry, August soybeans jumped 1.6% to $10.26 ¾ a bushel. New crop November soybeans added 1.0% to $9.88 a bushel.

Fund surge 

Still, that was nothing compared with arabica coffee beans, which soared 3.4% to 173.05 cents a pound in New York, their highest finish for 12 years.

The rise was attributed to fund buying, and automatic buy orders triggered by the commodity's surge.

"The question is - will it hold?" asked Ralph Hawes at Sucden Financial.

What was a resistance level at 170.00 cents a pound "is now support, so it will be important for the market to hold this level. If it fails we may just have seen a 'blow-out' for the near term".