Wheat Rises to 13-Month High on Hot, Dry Weather in Russia; Corn, Soy Gain
Wheat rose to a 13-month high, while corn and soybeans extended gains, as hot, dry weather damaged crops from Russia to France, boosting demand for supplies from the U.S.
Temperatures will top 100 degrees (38 Celsius) during the next 10 days in Russia and Kazakhstan, reducing crop potential, according to QT Weather in Chicago. Global wheat and feed-grain production will fall 1.6 percent to 1,753 million metric tons, a three-year low, the International Grains Council said. World reserves before next year’s Northern Hemisphere harvest may drop 5.4 percent.
“Weather rallies are fast and furious, and the adverse weather has generated new speculative-buying interest,” said Jim Gerlach, the president of A/C Trading Inc. in Fowler, Indiana. “We’re not going to run out of wheat anytime soon, despite some problems in global production, and that could trigger some selling.”
Wheat futures for September delivery rose 12 cents, or 1.9 percent, to close at $6.275 a bushel at 1:15 p.m. on the Chicago Board of Trade. The price earlier touched $6.32, the highest level for the most-active futures since June 11, 2009. The commodity has gained 31 percent this month, heading for the largest monthly gain since August 1973.
Corn futures for December delivery rose 3 cents, or 0.8 percent, to close at $3.9375 a bushel on the CBOT, after touching $3.995, the highest level since July 22. The commodity has gained 14 percent since June 29, the day before the government said U.S. farmers planted less this year than they had planned.
Soybean futures for November delivery climbed 10 cents, or 1 percent, to $9.88 a bushel in Chicago. The oilseed, used to make animal feed and cooking oil, has risen 9.5 percent this month, heading for the first monthly gain since April.
Food Prices
Global food prices rose 1.9 percent in July from the previous month, according to a report today from the United Nations’ Food and Agriculture Organization. Food prices are up 12.2 percent from a year earlier.
The world’s farmers will harvest 651 million tons of wheat in the 2010-2011 crop year, 13 million tons less than forecast last month, the council said. Consumption will amount to 655 million tons, according to the report.
Russia will harvest 50 million tons of wheat in 2010, 7 million less than forecast in June, while Kazakhstan’s crop will be 13.5 million tons, down from 16.5 million tons forecast earlier, according to the council. France, the European Union’s largest wheat producer, will harvest 5.2 percent less this year, farm adviser Offre et Demande Agricole said today.
U.S. Exports
The U.S. will export 26 million tons in the marketing year that began June 1, more than a previous forecast of 24.1 million tons, the Grains Council said. A year earlier, exports totaled 23 million tons.
In the week ended July 22, U.S. exporters sold 919,894 tons of wheat for delivery before June 1, more than double a week earlier and up from 575,070 a year earlier, the U.S. Department of Agriculture said today.
Sales of soybeans for delivery during the final month of the current marketing year and the one that begins Sept. 1 rose to 1.483 million tons, up from 1.227 million a week earlier, the USDA said.
Corn sales for delivery before the end of August, fell to 432,322 tons, compared with 614,121 a week earlier, the USDA said. In a separate report today, the department said Mexico bought 146,000 tons.
“Today’s confirmation from a respected source that former Soviet Union supplies are being hurt significantly provides more confidence to bulls and puts more pressure on importers to cover their needs sooner, not later,” Jerry Gidel, a market analyst for North American Risk Management Services Inc., said in an e- mail.
Corn is the biggest U.S. crop, valued at $48.6 billion in 2009, followed by soybeans, hay and wheat, government figures show.
To contact the reporter on this story: Jeff Wilson in Chicago at jwilson29@bloomberg.net
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