Wheat rose the most in five weeks after farmers in western Canada planted the fewest acres since 1971, reducing yield prospects for the world’s biggest exporter of the grain behind the U.S.
Spring-wheat acreage is expected to fall 9 percent from last year and durum seeding may fall 40 percent because of low prices and excessive rain, said Bruce Burnett, the director of weather and market analysis at the Canadian Wheat Board. Western Canada, the nation’s biggest growing region, may produce 22 percent this year at 18.9 million tons, Burnett said today.
“Reduced production could increase U.S. exports,” said Terry Reilly, a market analyst for CitiGroup Global Markets in Chicago. “The acreage losses may be higher,” because rains continue to delay planting in Canada, Reilly said.
Wheat futures for July delivery jumped 7.5 cents, or 1.7 percent, to $4.4075 a bushel on the Chicago Board of Trade, the biggest gain since May 4. The commodity gained 1.1 percent this week, the first advance in three weeks. The most-active contract has fallen 19 percent this year because of reduced demand for U.S. grain and rising global stockpiles.
Futures also gained on speculation that low prices and declining inventories of corn will boost demand for wheat in feed rations for U.S. livestock.
Corn inventories will total 1.603 billion bushels on Aug. 31, the lowest level for that time of year since 2007, the U.S. Department of Agriculture said yesterday. As corn stockpiles decline and prices rise, feedlot managers may turn to wheat, Reilly said.
Wheat used in livestock feed will rise to 200 million bushels in the marketing year that began June 1, up from 180 million last year, the USDA said this week.
“Wheat is cheap relative to corn,” Reilly said. “Wheat- feed use may rise to 230 million bushels.”
Wheat is the fourth-biggest U.S. crop, valued at $10.6 billion in 2009, behind corn, soybeans and hay, government data show.