Wheat futures rose to a five-week high on speculation that global supplies will tighten as crop conditions deteriorate in the U.S. because of dry weather and rain delays planting in parts of Europe.
About 39 percent of the U.S. winter crop was in good or excellent condition as of Nov. 4, the lowest for the week since data started 27 years ago, the Department of Agriculture said on Nov. 5. The French soft-wheat crop was 64 percent planted as of Oct. 29, compared with 88 percent last year, FranceAgriMer said on Nov. 2.
“In the U.S. Plains, they’re going into dormancy in very dry conditions,” Mike O’Dea, a risk-management consultant at INTL FCStone in Kansas City, Missouri, said in a telephone interview. As the French price rises, “it will give the impression that U.S. grain is undervalued compared to the world market,” he said.
Wheat futures for December delivery gained 1.9 percent to settle at $8.94 a bushel at 2 p.m. on the Chicago Board of Trade, after reaching $8.97, the highest for a most-active contract since Oct. 1.
The grain is the fourth-largest U.S. crop, valued at $14.4 billion in 2011, behind corn, soybeans and hay, government data show.
In Paris, milling-wheat futures for January delivery gained 1.5 percent to 275.50 euros ($351.70) a metric ton on NYSE Liffe. Earlier, the contract reached a record 277.50 euros.