Wheat Gains as USDA Expected to Lower Global Stockpiles Forecast

(Bloomberg) – Wheat rose to a five-week high on speculation that the U.S. government will reduce its estimate of global stockpiles estimate in a report tomorrow as output drops in Russia and France, Europe’s biggest grower.

Global inventories before next year’s harvest in the Northern Hemisphere will total 171.5 million metric tons, less than last month’s forecast of 173 million, according to a Bloomberg News survey. France cut its production outlook, and dry weather is threatening the crop in Russia, last year’s third-biggest exporter behind the U.S. and Australia.

“People are saying there’s going to be a drop in world ending stocks,” Tom Leffler, the owner of Leffler Commodities LLC in Augusta, Kansas, said by telephone. “That has everybody worked up.” The U.S. Department of Agriculture will issue its monthly crop report tomorrow at 8:30 a.m. in Washington.

Wheat futures for December delivery gained 0.9 percent to $9.0225 a bushel at 10:37 a.m. on the Chicago Board of Trade, after touching $9.0325, the highest since Oct. 1. On NYSE Liffe in Paris, milling wheat for January delivery rose 0.7 percent to 277.5 euros ($352.54) a ton, after reaching a record 278 euros.

FranceAgriMer, the government crops office, today cut its domestic production outlook to 35.8 million tons, from a previous forecast at 36 million. About 20 percent to 25 percent of winter grain in Russia’s main growing regions may be lost as seeds haven’t yet sprouted after dry weather, the Moscow-based Institute for Agricultural Market Studies said today.

U.S. winter wheat was in the worst condition in 27 years as of Nov. 4 because of drought, Department of Agriculture data show. Little or no rain has fallen in parts of the southern Great Plains in the past 30 days, National Weather Service data show.

To contact the reporters on this story: Whitney McFerron in London at wmcferron1@bloomberg.net, or Tony C. Dreibus in Chicago at tdreibus@bloomberg.net.

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net