Wheat futures, little changed today, capped the fourth straight weekly gain as adverse weather slashed production in Russia and Canada, two of the world’s four-biggest exporters.
Drought in Russia damaged 32 percent of the planted grain, Agriculture Minister Yelena Skrynnik said today. Harvests in Canada and Ukraine will decline after excessive rainfall reduced seeding and hurt crop prospects. The price gained 1.5 percent this week and is up 24 percent in July.
“Canada has some problems, and there’s concern about severe drought in Russia and Eastern Europe and drought in China,” said Dan Kuechenmeister, the manager of the commodities department at RBC Dain Rauscher in Minneapolis. “Wheat’s had a good surge. Now we need to make sure the underlying fundamentals support the move.”
Wheat futures for September delivery fell 0.25 cent to $5.9625 a bushel on the Chicago Board of Trade. Yesterday, the grain reached $6.10, the highest level for a most-active contract since June 16, 2009.
Wheat rose as much as 1.2 percent today, before settling lower. The price may have declined from its highs as investors weighed evidence of ample global stockpiles and increased U.S. output against concerns that supplies are dropping from some major exporters.
“U.S. supplies are good and we have no real problems here,” Kuechenmeister said. “The market needs to catch its breath.” Some speculative investors also may be closing positions before the weekend, especially if they had bet prices would rise, he said.
The U.S. is the biggest exporter, followed by Canada, Australia and Russia. Wheat is the fourth-biggest U.S. crop, valued at $10.6 billion in 2009, behind corn, soybeans and hay, government data show.