Oct. 11 (Bloomberg) -- Wheat prices may rise in the short-term on demand from China and Brazil, as well as an outlook for reduced planting in Russia, said Francois Luguenot, head of market analysis at French grain cooperative Union InVivo.
The wheat market has become increasingly uncertain in recent months, with a delayed U.S. corn harvest creating additional demand for the grain, Luguenot said in an interview at the European Commodities Exchange in Paris today.
Wheat rose 3.7 percent in Chicago in September, the biggest such gain in five months, and has advanced 1 percent this month. The grain is the second-best performer on the S&P GSCI Commodity Index in the past month, behind sugar.
“The sources of incertitude on the grain market, particularly wheat, have multiplied,” Luguenot said.
Luguenot cited speculation about how much wheat China will import, which he said could be 6 million to 10 million metric tons, as well as buying by Iran and Brazil. Morocco’s wheat harvest was “less gigantic” than first expected, Luguenot said.
Additional questions surround the size of the wheat harvest in the Southern Hemisphere, Egypt’s ability to pay for imports, wheat availability in the Black Sea region due to stocks rebuilding and Russia’s planting for the 2014 harvest.
“In Russia, you have two elements,” Luguenot said. “What will the government do on stocks, and that could have immediate effect on availability, and there is the risk of area losses in wheat.”
The Black Sea region will run down supplies of wheat to export at “some point” in the 2013-14 marketing year, which could be as early as in the first half, the analyst said. The U.S. exported wheat to China and Brazil in the first half, when typically the pace of wheat shipments is strongest in the second half, according to Luguenot.
Wheat prices may come under pressure toward the end of 2013 due to the arrival of the delayed U.S. corn crop as well as the approaching Southern Hemisphere wheat harvest, he said.
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