Wheat Advances for Second Day as Price Slump Lures Importers, Investors
Aug. 18 (Bloomberg) -- Dennis Gartman, an economist and editor of the Gartman Letter, talks about the U.S. Treasury market. Gartman, speaking with Margaret Brennan on Bloomberg Television's "InBusiness," also discusses hedge-fund icon Stanley Druckenmiller's plan to shut his firm and the outlook for commodities and currencies. (Source: Bloomberg)
Wheat futures advanced for a second day on speculation that a slump in prices since the contract jumped as drought in Russia prompted the country to ban exports is attracting investors and importers.
December-delivery wheat rallied as much as 2.2 percent to $7.0375 a bushel on the Chicago Board of Trade and was at $6.995 at 10:36 a.m. Singapore time. The contract climbed to $8.68 on Aug. 6, the highest price since Aug. 26, 2008, and slumped 21 percent through yesterday.
“It’s been heavily sold off from two weeks ago,” Peter McGuire, managing director at CWA Global Markets Pty., said by phone from Sydney today. The plunge in prices “was probably overboard,” he said.
The number of Russian states declared under emergency has risen to 32, the Ministry of Agriculture said yesterday, as the world’s third-largest grower of wheat last year suffers from the worst drought in at least half a century. Two more regions may be added to the list soon, the ministry said.
Russia’s total harvest of grains reached 40.1 million metric tons, including 28.5 million tons of wheat, as of Aug. 18, the ministry said. Harvests came from 54 percent of planted areas, it said.
The nation implemented a ban on grain exports, including wheat, from Aug. 15 through Dec. 31 to secure domestic supply.
Rains in some western and central parts of Russia earlier this week were of “little help” to farmers preparing to plant winter crops, Anna Strashnaya, head of agro-meteorological forecasts at the Federal Hydrometeorological Center, said by telephone yesterday.
Rain Needed
Plantings of winter crops, mostly wheat, in the western and central parts of Russia and along the Volga River may be delayed to as late as Sept. 10, Strashnaya said. Winter crop plantings in the northern parts of the country have to be completed before Sept. 5 and the deadline for areas as far south as Belgorod is Sept. 20, she said.
“A great deal will depend upon whether we actually get rain in Russia, in Kazakhstan, in the eastern parts of Europe, where we’re getting ready to put the winter wheat crop in for next year,” said Dennis Gartman, an economist and editor of The Gartman Letter, said in a Bloomberg Television interview yesterday. “If we don’t get rain, and I mean good rain, in the next several weeks, we may have a problem going into next year’s crop.”
The Gartman Letter is a Suffolk, Virginia-based publication that provides advice on market trends to clients including banks, brokerage firms, hedge funds and mutual funds.
Egypt, the world’s biggest wheat importer, plans to buy at least 55,000 tons at a tender today, Nomani Nomani, the vice chairman of the General Authority for Supply Commodities, said yesterday by telephone from Cairo.
Corn for December delivery was little changed at $4.33 a bushel, while November-delivery soybeans lost 0.2 percent to $10.2825 a bushel.
To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net.
Rate this Page