Wheat Advances on Speculation Argentina May Reduce Export Quota
Wheat advanced on speculation that Argentina, the largest South American shipper, may further cut its export quota, adding to global supply concerns and prompting some investors to end bets on declines.
The grain for delivery in March climbed as much as 0.7 percent to $8.14 a bushel on the Chicago Board of Trade, and was at $8.1025 at 10:24 a.m. in Singapore. That takes the gain this year to 24 percent, making it the best performer on the Standard & Poor’s GSCI Commodity Index of 24 raw materials.
Low yields in Argentina in may trigger a second export- quota reduction two weeks to 3.37 million metric tons, after the nation unofficially cut the volume 25 percent to 4.5 million tons, La Nacion reported yesterday, citing producers it didn’t identify. The nation’s crop was damaged by drought in some areas and excessive rains in others, the newspaper said.
“Investors are probably covering their shorts,” Tetsu Emori, a commodity fund manager at Astmax Co. Ltd., said by phone from Tokyo, referring to investors closing bets on price declines. “There’s some uncertainty in production of wheat in the U.S. and exports in Argentina, and that’s probably the reason they think prices are near the bottom.”
Exports from all shippers are already forecast by the U.S. Department of Agriculture to slump 16 percent to 132.8 million tons, the smallest since 2011. That forecast is based on an estimate Argentina’s shipments will be 5.5 million tons. World exports are falling after dry weather from Australia to Russia curbed global output. Persistent drought in the U.S. threatens the winter crop for harvest in the 2013-2014 marketing year.
Corn for March delivery was little changed at $7.2375 a bushel in Chicago, 12 percent higher this year. Soybeans for delivery in the same month lost 0.4 percent to $14.8275 a bushel, paring the annual advance to 23 percent.
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