Wheat Gains for Second Day as Drought May Erode U.S. Supplies
Wheat rose for a second day in Paris on speculation global supplies will tighten because of dry weather in the U.S., the world’s largest exporter of the grain.
Only 34 percent of U.S. winter wheat was rated good or excellent as of Nov. 18, the worst condition since tracking of data began in 1985, Department of Agriculture figures show. Prices climbed 39 percent this year in Paris trading after droughts in the U.S., Russia and eastern Europe. European Union export licenses for soft wheat in the marketing year begun July 2 are up 11 percent from a year earlier.
“Matters are made worse for the hard, red winter wheat crop in that temperatures are warm, causing the wheat to mature earlier than it should and thus putting that crop at risk should normal cold winter temperatures return,” economist Dennis Gartman said of the U.S. today in his daily Gartman Letter.
Milling wheat for delivery in January added 0.3 percent to the day’s high of 271 euros ($350) a metric ton by 2:28 p.m. on NYSE Liffe in Paris. Prices are up 0.6 percent this week. Agricultural markets on the Chicago Board of Trade will open later today following yesterday’s Thanksgiving holiday.
Argentina, which had above-normal rains in recent weeks, may produce 10.1 million tons of wheat, the Buenos Aires Cereals Exchange said yesterday. That compares with the USDA’s estimate for the country of 11.5 million tons.
Corn for delivery in January gained 0.2 percent to 254 euros a ton in Paris. Rapeseed for delivery in February declined 0.2 percent to 470.75 euros a ton.
To contact the reporter on this story: Whitney McFerron in London at email@example.com