Wheat Rises, Resumes Rally After Russia Says Grain Forecast May Fall Again
Wheat is harvested using a combine harvester on a farm at Lipetsk, Russia. Source: Black Earth Farming via Bloomberg
Wheat jumped in Paris and Chicago, rebounding from a decline after Russia said it may again cut its outlook for this year’s grain harvest because of a crop- damaging drought.
September-delivery wheat rose 1.5 percent to $5.8875 a bushel on the Chicago Board of Trade at 2:14 p.m. Paris time, after falling 1.2 percent earlier today. Milling wheat for November delivery gained as much as 3.8 percent to 184.25 euros ($240.10) a metric ton on NYSE Liffe in the French capital.
The Russian grain harvest may be less than 80 million tons, Deputy Economy Minister Andrei Klepach said today, less than the current estimate for 85 million tons. The crop may fall below 70 million tons as yields decline because of the worst drought in at least a decade, researcher SovEcon said.
“Russia remains the focus of all attention,” Bourges, France-based farm adviser Offre et Demande Agricole said on its website today. “The impact of the drought on production is still uncertain and the wheat market could still hold some upward surprises in reserve.”
Paris milling wheat was at 180.75 euros in recent trading, after falling as much as 1.8 percent earlier. The November contract has risen 24 percent in Paris this month, while Chicago wheat has climbed 25 percent.
Wheat prices in the European part of Russia rose 15 percent to 4,850 rubles ($160.40) a ton by July 23 from a week ago on concern that drought may curb supply, SovEcon said on its website. Russia was the third-largest grower in the 2009-10 season, according to the U.S. Department of Agriculture.
Corn for December delivery rose 1.3 percent to $3.8275 a bushel in Chicago.
November-delivery soybeans rose 0.6 percent to $9.715 a bushel.
To contact the reporter on this story: Rudy Ruitenberg in Paris at rruitenberg@bloomberg.net.
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