Wheat futures rebounded from a 13-month low in Chicago on signs that cheaper grain is fueling purchases by importers. Corn extended its slump after touching a 33-month low, while soybeans rose.
Export sales of U.S. wheat are up 45 percent since June 1, compared with the same period a year earlier, reaching 12.31 million metric tons as of July 18, the government reported yesterday. Purchases by China, the world’s largest consumer, are up 10-fold during the period at 3.45 million tons, while Brazil bought 1.2 million tons, up from 50,000 a year earlier. Futures dropped 28 percent in the 12 months through yesterday.
“U.S. wheat is competitive on the world market,” Ken Smithmier, a grain analyst for the Hightower Report in Chicago, said in a telephone interview. “Demand from China and Brazil is improving.”
Wheat futures for delivery in September rose 0.2 percent to close $6.5025 a bushel at 1:15 p.m. on the Chicago Board of Trade, after yesterday touching $6.48, the lowest for a most-active contract since June 19, 2012. The grain ended the week down 2.1 percent, the second straight decline.
Corn futures for December delivery slid 0.6 percent to $4.76 a bushel in Chicago, after touching $4.7475, the lowest for a most-active contract since Oct. 4, 2010.
Prices are down 39 percent from a year ago, when the grain was headed for a record high of $8.49 on Aug. 10 as a drought cut production. This year, farmers will boost output by 29 percent to a record 13.95 million bushels, the U.S. Department of Agriculture said on July 11.
Forecasts of rain in the U.S. Midwest are improving prospects for the nation’s corn crop. Production in Iowa, the biggest grower, will rise 23 percent this year from the drought-damaged crop of 2012, Doane Advisory Services Co. said today, after touring four Midwest states this week.
“Recent rainfall and cool temperatures have gone a long way in assuring good yields,” Bill Gary, the president of Commodity Information Services in Oklahoma City, Oklahoma, said today in a note to clients. “With the current forecast indicating cool weather into mid-August, the only major hazard to bumper crops of corn and soybeans will be an early frost.”
Soybeans for delivery in November rose 0.4 percent to $12.285 a bushel on the CBOT, after reaching a 17-month low of $12.0725. Prices have dropped 22 percent in the past 12 months after Brazil and Argentina combined to harvest 24 percent more than a year earlier.
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