Wheat Declines on Speculation Rains to Help Winter-Crop Sowing in Russia
Wheat declined, reversing earlier gains, on speculation that rains forecast in Russia may help the sowing of winter crops after the worst drought in at least 50 years slashed output and prompted a ban on grain exports.
Wheat for December delivery dropped 0.4 percent to $7.0475 a bushel on the Chicago Board of Trade at 1:39 p.m. in Singapore compared with an earlier gain of 0.3 percent. The price fell the most in a week yesterday.
Showers are expected in Russia, Kazakhstan and East Ukraine in the five days from Aug. 24, helping to replenish soil moisture for planting winter wheat in northern areas, Telvent DTN Inc. said in a forecast yesterday. Russia’s ban on shipments helped drive wheat to $8.68 on Aug. 6, a 23-month high.
“Wheat is likely to weaken further,” Chung Yang Ker, an analyst at Phillip Futures Pte. in Singapore, said in a report e-mailed today. “The wetter weather is expected to promote planting in former Soviet states that have been hit hard by drought,” improving yield prospects, he said.
Russian farmers began sowing some winter crops after rain fell in central regions last week, though planting conditions will mostly stay worse than usual in the next 10 days, Russia’s Federal Hydrometeorological Center said on Aug. 23.
The government was forced to lower its forecast for the national grain crop by 38 percent to as little as 60 million metric tons after the drought parched crops. Farmers have delayed sowing winter grains because of the drought and may have to boost the area planted with lower-yielding spring grains.
U.S. Exports
The wheat price rose earlier on speculation that importers will increase purchases of U.S. crops. Wheat inspected for export from U.S. ports this marketing year rose 26 percent to 209.4 million bushels as of the week ended Aug. 19, from a year ago, the nation’s Department of Agriculture said Aug. 23.
“There has been increasing demand for U.S. wheat and corn after the drought,” said Han Sung Min, a grain futures broker at Korea Exchange Bank Futures co. in Seoul. “I remain bullish on wheat and other grains.”
Egypt, the world’s biggest wheat importer, is seeking to buy at least 55,000 tons from the U.S., Europe and Canada at a tender today, Nomani Nomani, the vice chairman of the General Authority for Supply Commodities, said yesterday.
The December-delivery corn contract fell 0.4 percent to $4.19 a bushel, extending yesterday’s 2.8 percent slump, the most since July 19. Soybeans for November delivery gained 0.2 percent at $10.005 a bushel.
To contact the reporters on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net. Sungwoo Park in Seoul at spark47@bloomberg.net.
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