Wheat Trims 5th Weekly Loss, Bear Market May Spur Demand
Category: Grains
(Bloomberg) – Wheat rose, trimming a fifth weekly loss, amid speculation that a slump into a bear market may spur demand as Egypt bought grain from Romania and Russia yesterday.
Wheat entered a bear market on June 11 after the U.S. Department of Agriculture raised its forecast for global inventories. Egypt’s state grain authority bought 180,000 metric tons of wheat yesterday in its first international wheat tender for shipping in 2014-15.
Wheat for July delivery rose 0.6 percent to $5.89 a bushel on the Chicago Board of Trade at 6:04 a.m. local time, after touching $5.84 yesterday, the lowest for a most-active contract since Feb. 12. Chicago wheat futures are set to drop 4.7 percent this week. Milling wheat for November delivery traded on Euronext in Paris rose 0.1 percent to 188 euros ($255) a ton.
“You’ve always got to find some area of support after such a big move,” said Jonathan Barratt, the chief investment officer at Ayers Alliance Securities in Sydney. “You’ve got a market that is short and getting shorter.”
Rising grain supplies are helping keep global food costs in check, with the United Nations saying world prices fell in May for the second straight month. The Standard & Poor’s GSCI Agricultural Index of eight crops is set to drop for a seventh week, the longest such slump since October 2001.
World wheat inventories by the end of May will reach 188.6 million metric tons, the U.S. Department of Agriculture said June 11. That compares to last month’s estimate of 187.4 million tons. Global output will total 701.6 million tons from 697 million tons forecast in May as production outside the U.S. increases, the USDA said.
Corn for December delivery rose 0.9 percent to $4.4775 a bushel after dropping to $4.3875 yesterday, the lowest since Feb. 11. Futures are heading for a fifth weekly loss.
Soybeans for delivery in November added 0.4 percent to $12.165 a bushel.
