Wheat Declines as Surge Prompts Sales by Investors; Corn, Soybeans Retreat

Wheat declined from the highest price in almost a month, and corn and soybeans fell, as investors locked in gains after yesterday’s rally.

March-delivery wheat dropped as much as 1 percent to $7.325 a bushel on the Chicago Board of Trade, after yesterday jumping as much as 7.9 percent to the highest price since Nov. 12. The contract was at $7.39 a bushel by 2:11 p.m. in Singapore.

“It’s just profit-taking,” Tetsu Emori, a commodity fund manager at Astmax Co. Ltd., said by phone from Tokyo, referring to the reason for the price declines. “People have to make money by the end of the year.”

Still, investors and importers remain concerned about the global supply of high-quality wheat used in food, as import demand expands, helping sustain the rally, he said.

High-quality wheat may be “in short supply” in the 2010-2011 season after rain hurt crops in Australia and Europe and dry weather curbed production in Russia, Martell Crop Projections said yesterday.

Wet weather in eastern Australia has delayed harvesting, with southern New South Wales and Victoria receiving more than 100 millimeters (3.9 inches) of rain in November, three times the normal amount, forecaster Gail Martell, the head of Whitefish Bay, Wisconsin-based company, said in a report.

As much as 30 percent of the crop in New South Wales, Australia’s biggest wheat-producing state, may be downgraded to feed grade, suitable only for animals, because of excessive rain, said Peter Matthews, a specialist at Industry & Investment NSW. In the U.S., dry weather in the western Great Plains has threatened winter crops.

‘Devastating Losses’

Feed volumes could reach 20 percent to 30 percent of the state’s crop, estimated at 9.2 million tons, compared with 4 percent to 5 percent normally, he said.

While some wheat in Australia’s east may be downgraded to feed quality because of excess rain, low rainfall in Western Australia during the growing season caused “devastating losses” and a “very poor” harvest in the country’s top producing state, according to Martell.

Higher-quality grain from France and the U.K. “is flying off the shelf,” after a “super-wet harvest” in Germany, Poland, the Czech Republic, Slovakia and Hungary this year damaged wheat quality in those countries, Martell said.

Corn for March delivery lost 0.9 percent to $5.61 a bushel after closing 4.1 percent higher yesterday. January-delivery soybeans slipped 0.4 percent to $12.775 a bushel, after advancing 3.2 percent yesterday.

Rough-rice for January delivery rose for a fourth day, gaining 0.5 percent to $14.44 per 100 pounds. Bangladesh, South Asia’s biggest rice importer, plans to more than double overseas purchases to 600,000 tons in the year that began July 1, Badrul Hasan, director for procurement at the Directorate General of Food, said Nov. 30.

To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net.

To contact the editors responsible for this story: James Poole at jpoole4@bloomberg.net

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