Wheat rose for the second time in three sessions on signs of progress in resolving a U.S. budget dispute that threatened to slow the economy and erode demand for commodities.
House Speaker John Boehner said today that he will push a budget “plan B” measure that will include tax increases for those making more than $1 million a year and that he hopes to reach a broader deal with President Barack Obama. A solution will prevent $600 billion in automatic spending cuts and tax increases and reduce concern that demand for raw materials will decline. The Standard & Poor’s GSCI Spot Index of 24 raw materials climbed for the second time in three sessions.
“There’s more optimism than I’ve seen in a month as far as a deal getting done,” Mike Zuzolo, the president at Global Commodity Analytics in Lafayette, Indiana, said by telephone. “The funds had done a good job liquidating so the short traders are buying back.”
Wheat futures for March delivery advanced 0.4 percent to settle at $8.1125 a bushel at 2 p.m. on the Chicago Board of Trade. The price has risen 24 percent this year.
In the U.S., wheat is the fourth-largest crop, valued at $14.4 billion in 2011, behind corn, soybeans and hay, government data show.