Wheat Jumps to Six-Month High as Baltic-Region Output May Trail Forecasts
Wheat rose to a six-month high on signs that output will be less than expected in exporting countries near the Baltic Sea, boosting demand for supplies from the U.S., the world’s largest shipper.
Ukraine lowered its grain-output forecast by 6.7 percent to 42 million metric tons after rains delayed harvests and eroded crop quality, Interfax reported today. Researcher SovEcon said last week that Russia’s worst drought in at least a decade may reduce the country’s wheat production by 21 percent.
Reduced supplies from the Baltic will mean “some higher demand” for U.S. wheat, said Jon Marcus, the president of Lakefront Futures and Options LLC in Chicago. “That’s the only thing that’s bullish right now.”
Wheat futures for September delivery advanced 9.75 cents, or 1.8 percent, to $5.59 a bushel on the Chicago Board of Trade, after touching $5.66, the highest price for a most-active contract since Jan. 12. Wheat has jumped 16 percent in July, partly as hot weather hurt crops in Russia and France while excessive moisture threatened grain in Canada.
U.S. exports may improve as importers seek alternative supplies, said Alexander Bos, an analyst at Macquarie Group Ltd. in London.
The world’s biggest shippers of wheat are the U.S., Canada, Australia, Russia, Ukraine and Kazakhstan, U.S. Department of Agriculture data show.
Wheat is the fourth-biggest U.S. crop, valued at $10.6 billion in 2009, behind corn, soybeans and hay, government data show.
To contact the reporter on this story: Tony C. Dreibus in Chicago at tdreibus@bloomberg.net.
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