Wheat Gains as Australian Weather Adds to Global Supply Concern

Wheat advanced for the first time in five days on concern that global supplies will tighten as dry weather reduces crops from Australia to eastern Europe while demand increases in north Africa.

Australia may ship 17 million metric tons of wheat this season, 31 percent less than in the previous marketing year when the country was the world’s second-largest exporter, according to a Bloomberg survey. Ukraine’s government said the country shipped 4 million tons of wheat since the season began July 1. Egypt, the world’s biggest wheat importer, is seeking at least 60,000 tons in a tender today.

“Declining estimates of the Australian crop, and hence exports, have provided support to prices over the past couple of months,” Michael Creed, an agribusiness economist at National Australia Bank Ltd., said in an e-mail.

Wheat for December delivery rose 1.1 percent to $8.6575 a bushel at 6:43 a.m. on the Chicago Board of Trade, paring a monthly decline to 4.1 percent. In Paris, January-delivery milling wheat gained 0.8 percent to 265.50 euros ($345.44) a ton on NYSE Liffe, little changed this month.

Ukraine’s wheat crop may total 15.5 million tons, 30 percent less than last year, because of dry weather, according to the U.S. Department of Agriculture. Demand has accelerated as supplies also tightened in Russia, while speculation increased that Ukraine will restrict exports next month. Australia may produce 21.2 million tons in the 2012-13 season, down from a record 29.5 million last year, according to a Bloomberg survey.

Corn for delivery in December added 0.6 percent to $7.46 a bushel in Chicago, poised for a 1.4 percent drop in October, the third monthly decline for a most-active contract. January- delivery soybeans rose 0.6 percent to $15.4575 a bushel, paring a second monthly loss to 3.5 percent.

Argentina’s Corn

Rain has delayed planting in Argentina, last year’s largest corn shipper after the U.S., with 40 percent of the crop sown so far, compared with 60 percent in prior years, the Rosario Cereals Exchange said yesterday. South American soybean prospects have worsened because of overly dry conditions in the Brazilian states of Mato Grosso and Goias, Hamburg-based researcher Oil World said yesterday. The USDA expects Brazil to harvest a record 81 million tons of soybeans.

“The prospect of high South American production in the current season following last year’s meager harvest as a result of drought has ensured that the soybean price has remained stubbornly below the $16 per bushel mark in recent weeks,” said Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt. “This could change, however, if market players were to increasingly share the opinion of analyst firm Oil World.”

To contact the reporters on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net; Whitney McFerron in London at wmcferron1@bloomberg.net.

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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