Wheat Climbs to One-Month High as Winter Threatens Russian Crop

January 22nd, 2013

By:

Category: Grains, Oilseeds

Weather affecting agriculture(Bloomberg) – Wheat rose to a one-month high inChicago as crop losses from winter weather threatened Russian production, deepening concern about global supplies amid a persistent U.S. drought. Soybeans and corn climbed.

Winter-kill caused by freezing temperatures affected 9 percent of the 15.7 million hectares (38.8 million acres) sown with winter grains in Russia, the Agriculture Ministry said yesterday. About 82 percent of the area is planted with wheat and the rest mostly with barley and rye. Drought may persist in the U.S. Great Plains and spread across Texas in the next three months, according to the Climate Prediction Center.

“The Russian winter-kill definitely adds to concerns, given that supply is already tight,” Joyce Liu, an analyst at Phillip Futures Pte, said by phone from Singapore today. “The sharp rebound in U.S. exports, together with conditions of winter-wheat crops across the major exporting countries in the Northern Hemisphere, is pushing prices higher.”

Wheat for delivery in March gained 0.7 percent to $7.9675 a bushel at 6:22 a.m. on the Chicago Board of Trade, which was shut yesterday for Martin Luther King Jr. Day. The grain touched $7.9975, the highest for a most-active contract since Dec. 20. In Paris, milling wheat for delivery in March rose 0.4 percent to 252.50 euros ($336.99) a metric ton on NYSE Liffe.

U.S. export sales of wheat more than doubled to 536,166 tons in the week ended Jan. 10 from a week earlier, the U.S. Department of Agriculture said Jan. 17. Global inventories by the end of the 2012-13 marketing year may drop to a four-year low of 176.6 million tons, according to the USDA.

10th Advance in 11

Soybeans for delivery in March climbed 1.3 percent to $14.475 a bushel in Chicago after touching $14.4875, the highest price since Dec. 19. Corn for delivery in March rose 0.8 percent to $7.3325 a bushel, heading for a 10th gain in 11 sessions.

In Brazil, set to overtake the U.S. as the world’s largest soybean exporter, farmers have sold 57 percent of oilseed crops, compared with 49 percent a year ago, researcher Celeres said yesterday in an e-mailed report. They harvested 2 percent of the soybean crop. In Argentina, corn and soybean yields may be less than USDA forecasts because crops were planted late, Morgan Stanley said in a report Jan. 18.

There are “just enough trouble spots to keep the market bid from a weather perspective,” Rory Deverell, a commodity risk manager with INTL FCStone Inc. in Dublin, said today in an e-mailed report. South American conditions are “mixed as planting comes to a close and soybean harvesting commences.”

Brazil’s southern states of Rio Grande do Sul and Parana will be mostly dry through Jan. 24, forecaster DTN said in a report today. The region will see scattered to moderate showers on Jan. 25 before turning dry again during the weekend.

To contact the reporters on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net; Whitney McFerron in London at wmcferron1@bloomberg.net.

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

Add New Comment

Forgot password? or Register

You are commenting as a guest.