Wheat Rallies for First Time in Three Days as One-Week Low Lures Investors
Wheat gained for the first time in three days on speculation that a drop to a one-week low was excessive and as the dollar declined.
December-delivery wheat climbed to 1.7 percent to $6.9175 a bushel on the Chicago Board of Trade at 4:12 p.m. Tokyo time. The contract lost 6.2 percent in the past two days, falling to $6.7925 yesterday, the lowest price since Aug. 18.
“It’s a technical correction after plunging in the previous two days,” said Hiroyuki Kikukawa, general manager of research at IDO Securities Co. “The dollar’s rally and a rise in equities have also supported the rebound in grains.”
The Dollar Index, a six-currency gauge of its value, declined 0.5 percent, the first drop in six days. A weaker dollar boosts the appeal of U.S. grain to overseas buyers holding other currencies.
The MSCI Asia Pacific Index advanced from a one-month low amid speculation that declines this month made shares cheap relative to earnings. The Nikkei 225 Stock Average climbed as much as 0.7 percent after the Standard & Poor’s 500 Index rose 0.3 percent yesterday, snapping a four-day losing streak.
Turkey awarded private companies licenses to import a total of 330,000 metric tons of wheat duty-free this year, the state grain board said on its website today.
Corn for December delivery gained 1.2 percent to $4.25 a bushel, the first advance in four days. November-delivery soybeans were up 0.7 percent at $10.06 a bushel in Chicago after touching $9.935 yesterday, the lowest level since July 30.
The gains in wheat, corn and soybeans may be limited because of bigger harvests, Kikukawa said.
Corn production will reach 13.365 billion bushels, 1.9 percent more than 2009’s record crop, the U.S. Department of Agriculture said in an Aug. 12 report. As of Aug. 22, 8 percent of this year’s crop was mature, compared with the average of 6 percent over the past five years. About 70 percent of the crop was rated good or excellent, up from 69 percent a week earlier, the USDA said Aug. 23.
The soybean harvest was forecast to increase 2.2 percent to a record 3.433 billion bushels. Ratings for soybeans were 64 percent good or excellent, down from 66 percent, the USDA said.
About 53 percent of spring wheat was harvested, up from 34 percent a week earlier, the USDA said. Of the crop still in the ground, 82 percent earned top ratings, unchanged from the prior week, the USDA said.