Wheat Gains Most in Two Weeks on Increased Demand for U.S. Stockpiles
Wheat rose the most in two weeks after a government report showed increased overseas demand for U.S. grain.
Exporters sold 1.41 million metric tons in the week ended Aug. 12, up 4.4 percent from the week before, the U.S. Department of Agriculture said. Wheat has gained 8 percent this month as Russia, which trailed only the U.S. last year as an exporter of the grain, imposed a ban on external shipments.
“Export sales were high,” said Larry Glenn, an analyst at Frontier Ag in Quinter, Kansas. The effects of Russia’s ban “showed up today on the sales report. All of the grains were strong.”
Wheat futures for December delivery advanced 25.5 cents, or 3.7 percent, to close at $7.1425 a bushel at 1:15 p.m. on the Chicago Board of Trade, the biggest gain for a most-active contract since Aug. 5.
The price has gained 56 percent since the end of May as the worst Russian drought in at least a half-century damaged crops.
Turkey’s state grain board today said that it is considering unspecified measures to shield the domestic market from fluctuations in global prices. Those steps will be divulged in “coming days,” the board said.
Countries that can afford to stockpile grain will start to do so to protect themselves against rising prices, said Rich Feltes, the director of commodity research for MF Global Holdings Ltd. in Chicago. Poorer nations won’t have that option, he said.
“In these troubled economic times, it is simply going to be a function of the political priorities and the treasury capabilities of each individual country,” Feltes said.
Wheat is the fourth-largest U.S. crop, valued at $10.6 billion in 2009, behind corn, soybeans and hay.
To contact the reporter on this story: Tony C. Dreibus in Chicago at tdreibus@bloomberg.net.
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