(Bloomberg) – Wheat headed for the biggest weekly gain since September after freezing weather in the U.S. damaged crops in the world’s biggest exporter of the grain.
The contract for March delivery gained as much as 0.6 percent to $5.84 a bushel on the Chicago Board of Trade and was at $5.83 by 2:31 p.m. in Singapore. Prices are set to climb 4.9 percent this week, the biggest advance since the period ended Sept. 27.
In Kansas, the top U.S. producer of winter-wheat varieties, the crop was rated 35 percent in good or excellent condition, down from 58 percent on Dec. 30, the U.S. Department of Agriculture said Feb. 3. Investors became more bearish on wheat, boosting their net-short position, or bets on a decline, to 62,501 contracts in the week ended Jan. 28 from 56,571 a week earlier in Chicago, U.S. Commodity Futures Trading Commission data show.
“With such a large net-short position in CBOT wheat, it left the market highly vulnerable to short-covering if there were any adverse news regarding the U.S. crop,” Vanessa Tan, an analyst at Phillip Futures Pte in Singapore, said in an e-mail. The decline in crop ratings suggested that the crop was damaged, she said.
About 37 percent of the contiguous U.S. was in moderate-to-exceptional drought on Feb. 4, up from 36 percent a week earlier, according to the U.S. Drought Monitor. Wheat tumbled 22 percent last year as the USDA forecast global production will reach a record 712.66 million metric tons in 2013-2014 on bigger harvests in Australia, Canada and Russia.
Corn for March delivery lost 0.3 percent to $4.4175 a bushel. Prices are set to gain for a third week, the longest such rally since August. Soybeans were little changed at $13.2525 a bushel, set to gain 3.3 percent this week.
