Wheat Jumps Most Since March as Dry Weather Hampers Crops
Wheat rose the most since March on speculation that hot, dry weather will curb production in Kansas, the biggest U.S. grower of winter varieties.
Little or no rain has fallen in parts of southwest and central Kansas in the past month, National Weather Service data show. The dry weather has affected the critical filling stage when grain forms inside the head of the wheat plant, Kansas State University agronomist Jim Shroyer said. Plants turned white, and heads formed with little or no grain inside, he said.
“The center part of the state is one of the worst areas, and dry areas are expanding because we haven’t had any moisture,” Larry Glenn, an analyst at Frontier Ag in Quinter, Kansas, said by telephone. “We have another chance for rain this weekend, but they’re talking about spotty thundershowers, and that’s not what we need.”
Wheat futures for July delivery gained 5 percent to settle at $6.3875 a bushel at 1:15 p.m. on the Chicago Board of Trade, the biggest one-day gain since March 30. The commodity earlier touched $6.3975, the highest since May 2. The price has jumped 7 percent this week on the dry Kansas weather.
About 52 percent of Kansas’s winter wheat was in good or excellent condition as of May 13, down from 60 percent a week earlier, the U.S. Department of Agriculture said this week.
Warm, dry weather is forecast for most of the U.S. Great Plains and Midwest today, Telvent DTN Agricultural Meteorologist Joel Burgio said in a report. Temperatures in the southern Plains will be above normal, and rainfall will be below normal, he said.
“Conditions in the central Plains are horrid, and the forecast for southern Iowa and Illinois are very hot,” Nick Higgins, an analyst at Rabobank in London, said. “Definitely, the U.S. heat is driving the market.”
The price also surged after Iraq said it bought 400,000 metric tons of wheat from the U.S., Australia, Russia, Romania and Kazakhstan. The supplies are set for delivery in July and August, Amer Abdel-Aziz, the country’s grain board spokesman, said by telephone in Baghdad today.
Crops in southern Russia, the country’s main grain-exporting area, were damaged by drought, said Viktor Zubkov, the acting first deputy prime minister. A lack of rain in the area for more than a month has lowered soil moisture, Zubkov said at a meeting in Moscow today, according to a statement on the government’s website.
Wheat is the fourth-largest U.S. crop, valued at $14.4 billion in 2011, behind corn, soybeans and hay, government data show.
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