Chicago-traded soft red winter wheat, the world's bellwether wheat contract, soared 2.9% to $4.53 ¾ a bushel – a four-month closing high for a spot contract, and within an ace of a one-year top.
The gains far outpaced a 0.8% rise to $6.32 ½ a bushel in July high protein hard red spring wheat, as traded in Minneapolis and grown in the northern US Plains, which has been the epicentre of worries over the impact of drought in the likes of North Dakota and South Dakota.
The outperformance of Chicago wheat, which is being harvested in the US Midwest, and not seen in danger of weather losses, was viewed as evidence of speculators using the contract as a means of gaining exposure to broader recovery in wheat prices.
After overnight selling on the electronic market "dried up, bulls came back in", said Terry Reilly at Chicago broker Futures International, adding that they appeared to be encouraged by the "deterioration in" the spring wheat crop.
"The fact that the buying is in Chicago is an indication that maybe some of the funds have started to buy into the story," with Chicago the world's most liquid wheat contract, and so favoured by speculators.
"There might also be an aspect of money flow, with investors moving out of equities, and with the US dryness representing one of the best-known stories in commodities right now," Mr Reilly told Agrimoney.com.
Buying was also encouraged by weather worries outside the US, said Richard Feltes at RJ O'Brien, noting "concern over eroding European Union and Ukraine crops".
Weather service MDA said that "dryness will continue to stress wheat in central and eastern Ukraine wheat areas" for the next few days.
While in the six-to-10 day outlook showers in western Ukraine will improve moisture a bit for wheat growth… notable dryness will maintain stress on wheat across southern Belarus, central and eastern Ukraine, [Russia's] southern Central Region, and central North Caucasus".
In the EU, Strategie Grains cut its forecast for the bloc's soft wheat harvest this year by 1.1, tonnes to 141.6m tonnes, although that would still be 5.5m tonnes above last year's rain-affected crop.
"Whilst it is too early to describe a situation of drought stress at this stage, the dry conditions have certainly already taken a toll on ear cereal yield potentials," the influential analysis group said, cutting estimates in particular for French, German and Spanish crops.
And Agritel cautioned over further testing weather ahead, saying that crop condition "will have to be closely monitored in the perspective of another heatwave forecast for next week".
MDA said that "the continued dry and warm pattern in Italy, Spain, and France through early next week will allow moisture to decline and stress to build on corn and sunflowers".
Paris wheat for December rose 0.7% to E174.75 a tonne, a two-month closing high.
Furthermore, dryness is growing as an issue in Australia too, although yet early in the growing season, with Lanworth flagging "record low" soil moisture levels in Western Australia, the country's top wheat-growing state.
In fact, in the US itself, the weekly drought monitor showed some retreat in dryness in North Dakota and South Dakota, where the proportion of the state rated in drought eased by 4.5 points to 83.4%, and by 5.4 points to 45.1% respectively.
That said, to the west, the proportion of Montana in drought rose by 4 points to 20.6%, and to the east, the figure for Minnesota, where spring wheat condition has bucked the negative trend so far, added 2.3 points to 12.0%.
Still, "despite poor export sales and some rain coverage in the Dakotas, wheat is finding strength in the prospect of continued dry weather in most of the Dakotas and eastern Montana," CHS Hedging said.
The drop followed some mixed US export data, with shipments of 246,000 running bales (including pima cotton) last week not bad, if down a little on the figure for the week before.
Export sales of 197,600 running bales for 2017-18, which starts in August, were termed "outstanding" by Louis Rose at Rose Commodity Group.
However, with export sales for this season falling 16% week on week to a soft 73,000 running bales, including pima, "the current level of old crop commitments continues to suggest that the USDA's export projection" for US cotton in 2016-17 "is too high".
Indeed, the 14.5m-bale figure may be 300,000-500,000 bales too large, Mr Rose said.
He also noted that certified stocks of cotton for delivery against New York futures "continue to accrue and now stand at nearly 473,000 bales, which is bearish".
Stocks started 2017 at a little over 40,000 bales.
By Mike Verdin