Wheat futures rose for the ninth time in 10 sessions on speculation that dry weather from Ukraine to Argentina will limit global grain supplies.
Ukraine’s winter-wheat crop is in “poor condition” after persistent dry weather, and the lack of snow cover may leave crops vulnerable to damaging cold, Telvent DTN said today in a forecast. The country’s grain exports fell 9.3 percent in December from November, UkrAgroConsult said. A lack of sufficient rain also may hurt developing corn and soybean plants in Argentina, DTN said.
“A month ago, we all thought we were going to drown in wheat from Ukraine, and now all of a sudden, they’ve scaled their exports back,” Jason Britt, the president of brokerage Central States Commodities Inc., said by telephone from Kansas City, Missouri. “With the corn and bean markets doing what they’re doing, that’s sure helping our exports.”
Wheat futures for March delivery rose 1.2 percent to settle at $6.5275 a bushel at 1:15 p.m. on the Chicago Board of Trade. The price is up 13 percent since mid-December. Futures still dropped 18 percent this year, capping the biggest annual slump since 2008, on increasing world output.
U.S. exporters sold 431,213 metric tons of wheat in the week ended Dec. 22, 19 percent more than a week earlier, the U.S. Department of Agriculture said today. Wheat can be used as an alternative to corn and soybeans in livestock feed.
Wheat also may have gotten a boost from speculators buying contracts to close out bearish short positions, or bets prices will fall, Britt said. Hedge funds and other speculators have cut net-short positions by 17 percent since Nov. 22, when funds were the most bearish since at least 2006, U.S. Commodity Futures Trading Commission data show.
Wheat is the fourth-largest U.S. crop, valued at $13 billion in 2010, behind corn, soybeans and hay, government data show.