Wheat Heads for Biggest Two-Day Advance Since May on Demand for U.S. Crops
Wheat headed for the biggest two- day gain in 10 months in Chicago and corn advanced as import demand for U.S. grains surged, spurred by the plunge in prices after last week’s earthquake in Japan.
Wheat for May delivery climbed as much as 4.8 percent to $7.44 a bushel on the Chicago Board of Trade, adding to yesterday’s 7.3 percent jump, and was at $7.42 at 1:17 p.m. Paris time. Prices are up 12 percent in the past two days, the biggest jump for the most-active contract since May last year. The grain is set for a 3.2 percent advance this week.
“Excess remains the best word to describe the price evolution,” Paris-based farm adviser Agritel said in a commentary today. “After the downward panic from the past days, prices are rebounding just as violently.”
Wheat sales by U.S. exporters gained 15 percent from a week earlier to 663,700 metric tons in the week to March 10, the U.S. Department of Agriculture said in a report yesterday. The grain is for delivery in the year through May 31.
Wheat’s advance since yesterday erased the 8.2 percent drop in the two days through March 16, when concern about the effect of the earthquake and radiation leaks from Japan’s nuclear reactors sparked a sell-off in commodities. It is set for a 1.7 percent gain this week.
Milling Wheat
Milling wheat for May delivery traded on NYSE Liffe in Paris rose as much as 6.1 percent to 237.50 euros ($335.75) a ton and was last at 233.25 euros.
“The losing run seems to pause for now,” said Park Jong Beom, a trader at Tong Yang Futures Trading Co. in Seoul. “Except for the concern over Japan, the situation in the grain market is supportive from a fundamental perspective.”
In the U.S., excessive snow in the northern Great Plains and Midwest may spur floods that rival the record-setting deluge of 2009, threatening wheat crops and livestock as cities in the region stockpile sandbags.
North Dakota, the largest spring-wheat growing state, South Dakota and Minnesota got almost 3 feet since October, more snow than usual, National Weather Service data show. More than 20 inches remain in some areas, about the same amount that was on the ground at this time in 2009, before floods along the Red River of the North caused about $223.7 million in damage and killed more than 91,000 cattle.
Corn Advances
Corn for May delivery rose as much as 5.2 percent to $6.80 a bushel, adding to yesterday’s 4.9 percent jump. The contract traded recently at $6.7925, erasing the 7.4 percent loss in the two days through March 16 and set for a 2.3 percent gain this week.
U.S. exporters reported corn sales more than doubled to 1.04 million tons in the week ended March 10 from a week earlier, the USDA said. Exporters also reported the sale of 116,000 tons to unknown destinations for delivery before Sept. 1. The U.S. is the leading grower and exporter of the grain.
“Export sales suggest demand is improving,” Mark Schultz, the chief analyst at Northstar Commodity Investment Co. in Minneapolis, said yesterday.
China, the second-biggest producer, became a net importer last year for the first time since 1996 after adverse weather reduced crops.
“The export numbers were significantly better than expectations,” Agritel said. “The rumors of China’s return to buying ares helping the strong price increase.”
The Major Feedmill Group in South Korea, the world’s third- biggest corn importer, yesterday purchased 70,000 tons of U.S. corn for arrival by July 15 in a tender, according to two industry executives who took part in the bidding. On March 16, the Korea Feed Association, the biggest grain buyer in the nation, bought 110,000 tons of corn in a tender. Tunisia agreed to buy 25,000 tons in a tender. The price has tumbled 10 percent this month.
Soybeans for May delivery rose 1 percent to $13.485 a bushel, for a weekly gain of 1 percent.
To contact the reporters on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net; Sungwoo Park in Seoul at spark47@bloomberg.net.
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
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