Wheat Advances for Second Day as Demand Gains for U.S. Supplies

May 8th, 2012

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Category: Grains

(Bloomberg) – Wheat gained for a second day on signs that a 23 percent slump in the year through yesterday may have boosted demand for U.S. supplies. Corn climbed.

The July-delivery contract rose as much as 1 percent to $6.18 a bushel on the Chicago Board of Trade, and was at $6.155 at 3:14 p.m. Singapore time. Futures slumped 6.2 percent last week, the most since the five days ended Sept. 23.

About 24 million bushels bound for export were inspected at ports in the U.S., the largest shipper, in the week ended May 3, up 21 percent from a week earlier, the U.S. Department of Agriculture said yesterday.

“The sell-off last week certainly is helping uncover more international demand,” Simon Clancy, a director for brokerage services at Advance Trading Australasia Pty., said by phone from Sydney today. “It certainly continued to make U.S. wheat very attractive from an export perspective.”

Stockpiles in Australia, the second-biggest shipper, may be 8 million metric tons at Sept. 30, according to Emerald Group Australia Pty. Reserves were 8.97 million tons last year, data from the Australian Bureau of Agricultural and Resource Economics and Sciences showed.

Corn for July delivery rose 0.8 percent to $6.2475 a bushel, while soybeans for delivery in the same month were little changed at $14.6475 a bushel after gaining 0.4 percent.

Soybean stockpiles in the U.S., the world’s largest grower, are poised to drop to the lowest relative to consumption since at least 1965 after drought decimated crops across South America, driving China to buy more from Midwest farmers. Inventories will probably decline 20 percent to 172 million bushels (4.68 million tons) before next year’s harvest, according to the average of 31 analyst estimates compiled by Bloomberg.

To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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