Soybeans May Rebound On Speculation Heavy Rains Will Delay Brazil Harvest
Wheat declined for the third time this week on speculation production will rise next year as prices that gained 47 percent last year encourage farmers to increase planting.
World wheat production will rise, led by a possible 33 percent jump in Russia, on increased planting prompted by higher prices and as yields improve, the United Nation’s Food and Agriculture Organization said yesterday in its Crop Prospects and Food Situation report. Global production will increase 3.4 percent to 676 million metric tons in 2011, according to the report.
The FAO cites “higher yields per acre and acreage expansion as its reasons,” Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt, said today in a report. “This applies to Russia especially, where the wheat crop is set to surge by 32.5 percent this year to 55 million tons, after the drought-related slump last year.”
Wheat for May delivery fell 2 cents, or 0.3 percent, to $7.1225 a bushel at 10:35 a.m. London time on the Chicago Board of Trade. The price has declined 13 percent this month, partly on speculation stockpiles will rise amid declining demand for the grain.
Corn fluctuated as investors weighed increased demand for ethanol made from the grain and expanded seeding in the U.S., the world’s biggest exporter.
U.S. farmers will plant more corn and soybeans this year amid rising prices, Farm Futures magazine said in a statement yesterday, citing a survey of 1,400 growers. Corn sowing will increase 3.6 percent to 91.4 million acres from a year earlier, according to the magazine.
Biofuel Support
“As long as oil remains above $100 a barrel, corn prices should be well-supported thanks to demand for biofuel,” said Seo Jun Mo, a senior trader at KB Futures Co. in Seoul. “This looks more like a temporary correction.”
Corn for May delivery in Chicago fell 0.25 cent to $6.8075 a bushel in Chicago. Corn rallied 11 percent in the four days before March 23 and soybeans gained 7.5 percent in the five sessions through March 22 after crude oil gained to the highest in more than two years, boosting the appeal of biofuel.
May-delivery soybeans gained 2.5 cents, or 0.2 percent, to $13.5375 a bushel. U.S. acreage will climb 1.4 percent to a record 78.5 million, according to the magazine’s survey. The December projection was 77.42 million acres.
Crude oil for May delivery gained as much as 94 cents to $106.69 a barrel in electronic trading on the New York Mercantile Exchange, near the highest level for the most active contract since 2008.
To contact the reporter on this story: Sungwoo Park in Seoul at spark47@bloomberg.net, or Tony C. Dreibus in London at tdreibus@bloomberg.net.
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
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