(Bloomberg) – Wheat rose in Chicago, narrowing a fourth monthly decline in five, on speculation importers’ demand for U.S. supplies will strengthen after prices reached the lowest level since June this week.
The U.S. sold 699,257 metric tons of wheat for shipment this marketing year during the week ended Feb. 14, the most since December, the latest U.S. Department of Agriculture data show. The agency is set to release its next weekly export sales report today. Prices are down 7.9 percent this month, in part as recent snowstorms eased concerns that drought would hurt crops in the U.S., the world’s biggest wheat exporter.
“Traders will be following closely the U.S. wheat exports number,” said Arnaud Saulais, a broker at Starsupply Commodity Brokers in Nyon, Switzerland. “Milling wheat has been strongly supported by international demand over the past days.”
Wheat for delivery in May added 0.8 percent to $7.18 a bushel at 7:08 a.m. on the Chicago Board of Trade. The grain on Feb. 26 touched $6.9775, the lowest for a most-active contract since June 25. In Paris, milling wheat for delivery in May gained 0.6 percent to 239 euros ($314) a ton on NYSE Liffe.
U.S. export sales of wheat may be 350,000 tons to 900,000 tons in the week ended Feb. 21, compared with 414,070 tons a year earlier, according to a survey of five analysts by Bloomberg before the USDA report today.
Harvest in Russia
Russia may buy grain from southern areas of the country for state stockpiles if the harvest there is poor, Agriculture Minister Nikolai Fedorov said today in Moscow. Southern crops traditionally are used for exports, he said.
Corn for delivery in May gained 0.3 percent to $6.975 a bushel in Chicago, poised to drop 5.8 percent this month. The grain was 20.5 cents a bushel cheaper than May wheat.
In the past year, the corn contract traded on average at a discount of $1.3225 a bushel. Wheat cost only 16.25 cents a bushel more than corn on Feb. 26, the smallest gap ever for the two contracts. Both grains can be used in livestock feed.
Farmers have “been feeding wheat for most of the year and the lower relative price just makes it even more attractive,”said Michael Pitts, a commodity sales director at National Australia Bank Ltd.
Soybeans for delivery in May rose 0.3 percent to $14.435 a bushel. The oilseed was set to decline 1.7 percent in February.
