By Tony C. Dreibus
Jan. 14 (Bloomberg) -- Wheat rose the most allowed by exchanges in Chicago and Kansas City as the grain vies with surging commodities such as corn, soybeans and cotton for acres before spring planting starts.
Some spring-wheat farmers in the northern Great Plains may opt to plant more-profitable crops when seeding starts in April or May. Growers planted 3.6 percent more winter wheat in October and November, the U.S. Department of Agriculture said Dec. 11. That trailed analysts' estimates. Futures surged 77 percent last year, topping other commodities.
``There was the surprise in winter wheat, so now you have spring wheat in the mix for acres,'' said Jerod Leman, a broker at Wellington Commodities in Carmel, Indiana. ``Spring wheat is going to be scratching for acres.''
Wheat futures for March delivery rose 7.75 cents, or 0.9 percent, to $9.17 a bushel on the Chicago Board of Trade. The price earlier gained as much as 30 cents, the exchange limit. Futures reached a record $10.095 a bushel on Dec. 17, partly after drought damaged plants in Canada and Australia and excessive rain hurt the U.S. crop.
The U.S. is the largest exporter of wheat, followed by Canada, Russia, Argentina and Australia.
Corn futures rose 17 percent last year while soybeans gained 78 percent and cotton increased 21 percent.
Seedings of winter wheat fell 1 percent in the southern Great Plains, where the hard-red variety is grown, from a year earlier, the USDA said last week. Hard varieties, traded mostly on the Kansas City Board of Trade, compose about 70 percent of all winter wheat planted in the U.S., USDA data show.
Hard-Red Variety
Futures for March delivery in Kansas City rose 9 cents, or 1 percent, to $9.33 a bushel. The price, which earlier jumped as much as 30 cents, the exchange limit, has gained 85 percent in the past year. Futures reached a record $10.2925 a bushel on Dec. 17.
In October and November, farmers planted less wheat in Kansas, partly because some growers intend to sow corn in the spring, said Jim Shroyer, an agronomist at Kansas State University in Manhattan, Kansas. The USDA said last week that seedings in the state fell 5 percent from 2006.
Acres planted with soft red-winter wheat, grown mostly in the eastern Midwest including Ohio and Indiana, rose 21 percent, the government said.
General Mills Inc., Kellogg Co. and Sara Lee Corp. have increased retail prices because of higher wheat costs. General Mills, the second-biggest U.S. cereal-maker, last week said it raised the price of Pillsbury refrigerated dough. Sara Lee has increased bread fees and said it expects to raise prices again in 2008.
Wheat was the fourth-biggest U.S. crop in 2006, valued at $7.7 billion, behind corn, soybeans and hay, government data show.
To contact the reporter on this story: Tony C. Dreibus in Chicago at Tdreibus@bloomberg.net.
Last Updated: January 14, 2008 15:49 EST
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