(Businessweek) – Wheat futures rose on demand by China for exports from the U.S., the world’s largest shipper. Soybeans and corn also advanced.
The U.S. Department of Agriculture said today that exporters sold 840,000 metric tons of soft red winter wheat to China for delivery before May 31. The agency on July 3 announced a shipment of 360,000 tons. From June 1 to June 27, combined sales and shipments were 1.83 million tons, five times more than a year earlier.
“Confirmation of new Chinese business is a positive factor,” Greg Grow, the director of agribusiness for Archer Financial Services Inc. in Chicago, said in a telephone interview. “The Chinese sales show that U.S. wheat is competitive against other world supplies and suggest prices are making a seasonal low.”
On the Chicago Board of Trade, wheat futures for September delivery gained 0.6 percent to $6.6425 a bushel at 10:56 a.m. On July 2, the price touched $6.5225, the lowest since June 19, 2012.
Wheat imported under China’s government-issued low-tariff quotas costs 2,100 yuan ($343) a ton, compared with a domestic price of 2,400 yuan, according to Shanghai JC Intelligence Co.
“Imported grains are cheap, and some local crops like wheat, which has had issues with quality, are struggling to compete,” Li Qiang, the chairman of Shanghai JC, said on July 5.
Wheat and soybeans rose on speculation that as much as 4 inches (10 centimeters) of rain in the past three days from Arkansas to Ohio damaged the grain crop and reduced the number of acres that farmers will plant with the oilseed, Grow said.
“It’s getting too late to double-crop soybeans,” Grow said. “Farmers probably will plant fewer soybeans than they intended because of the wheat-harvest delays.”
Soybean futures for November delivery climbed 0.7 percent to $12.3725 a bushel.
Corn futures for December delivery gained 1.4 percent to $4.9825 a bushel.
