Oct. 17 (Bloomberg) -- Wheat rose in Chicago as dry weather in Australia added to global supply concerns after the worst U.S. drought in half a century parched crops. Corn gained.
Wheat reserves in Australia, the second-largest exporter, fell 14 percent from a year earlier at the marketing season’s end on Sept. 30, the government said today. It expects production of the grain to drop to 22.5 million metric tons this year from the prior period’s record. Western Australia will remain dry in the next seven days, increasing risks of winter-crop damage, Telvent DTN Inc. said today.
“The dry weather in Australia is still a concern,” Victor Thianpiriya, an agricultural commodity analyst at Australia & New Zealand Banking Group Ltd., said by phone from Singapore.
Wheat for December delivery advanced 0.5 percent to $8.5225 a bushel by 6:56 a.m. on the Chicago Board of Trade. Prices slid 4.3 percent in the previous three days. In Paris, milling wheat for November delivery rose 0.2 percent to 258 euros ($339) a ton on NYSE Liffe.
Algeria issued a tender to buy 50,000 tons of wheat, which “held European wheat prices steady” before the results, French farm adviser Offre & Demande Agricole wrote in an e-mailed comment. “French wheat is in a good position and Algeria usually buys much more than it initially sets out to buy.”
Corn for delivery in December rose 0.6 percent to $7.4275 a bushel in Chicago. The grain has dropped 13 percent since concerns about the U.S. drought lifted prices to a record $8.49 a bushel on Aug. 10.
The premium companies pay for corn delivered to U.S. Gulf export elevators was 65 cents a bushel yesterday, up from 37 cents on Aug. 31, before the current marketing year began, U.S. Department of Agriculture data show. About 79 percent of the U.S. corn crop was collected as of Oct. 14, the USDA said the next day. The harvest was forecast to shrink to the smallest since the 2006-07 season because of the drought, the USDA said Oct. 11.
“The cash market for corn in the U.S. interior is still tight,” ANZ’s Thianpiriya said. “The market is still trying to find the right price to ration demand.”
Soybeans for delivery in November were little changed at $14.935 a bushel.
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