Wheat rose to the highest since April 2011 after the U.S. Department of Agriculture reduced its forecast for global production after dry weather curbed crops in Russia.
In the 12 months that started June 1, world output will total 665.3 million metric tons, down 1 percent from a June estimate, the USDA said in a report today. The agency cut its forecast for Russian production by 7.5 percent to 49 million tons and lowered its outlook for exports from the nation by 25 percent.
“The 30 to 40 percent losses in some areas of Russia are borne out by this production number today,” Mike Zuzolo, the president of Global Commodity Analytics & Consulting in Lafayette, Indiana, said by telephone. “These numbers confirm the losses” from the dry weather in Russia, he said.
Wheat futures for September delivery climbed 0.6 percent to settle at $8.2625 a bushel at 2 p.m. on the Chicago Board of Trade, after touching $8.485, the highest since April 27, 2011. The price has jumped 28 percent since the end of May, partly because of dry weather in parts of Russia and Ukraine.
Futures earlier dipped as much as 2.2 percent after the USDA said the Kansas wheat crop would be the biggest since 2003. “If you can get a break, you will have guys willing to step in and buy it,” Jason Britt, the president of Central States Commodities Inc. in Kansas City, Missouri, said by telephone. “I’m still a little hard-pressed to say that the highs are in.”