Wheat rose in Chicago to the highest price in almost four months on concern rainfall in Australia may curb supply of food-quality grain as dry weather threatens the U.S. crop.
Milling-wheat exports from eastern Australia may be 4.5 million metric tons in the 2010-2011 season, 2 million tons lower than forecast, as rains put 7.5 million tons at risk of being lowered to feed quality, Australia & New Zealand Banking Group Ltd. said in a report today. The country is the world’s fourth-biggest exporter of the grain.
“The U.S. may need to shoulder heavier demand for high- quality wheat after rains at harvest hurt crop quality in Australia,”
Ker Chung Yang, an investment analyst at Phillip Futures Pte, said in a report today. “Forecasts for little moisture in dry wheat areas of the western U.S. Plains are worrisome.”
Wheat for March delivery rose 15.5 cents, or 2.1 percent, to $7.64 a bushel at 11:07 a.m. London time on the Chicago Board of Trade. The grain touched $7.74, the highest price since Aug. 6. The most-active contract is up 11 percent this week, on course for the biggest rally in 18 weeks.
Milling wheat for January delivery traded on NYSE Liffe in Paris added 0.5 percent to 235 euros ($311) a ton, heading for a fifth gain. The price has increased 11 percent since Nov. 22, the last time futures declined.
Harvest Delay
As much as half of the east coast milling-wheat crop in Australia is at risk, ANZ said. Wet weather in the country’s east has delayed harvesting, with southern New South Wales and Victoria receiving three times the normal amount of rain in November, Martell Crop Projections said in a report.
As much as 30 percent of the crop in New South Wales, Australia’s biggest wheat-producing state, may be lowered to feed grade, suitable only for animals, because of excessive rain, said Peter Matthews, a specialist at Industry & Investment NSW. In the U.S., dry weather in the western Great Plains has threatened winter crops.
About 23 percent of winter wheat in China’s six main- growing provinces faces drought conditions, said Farmers’ Daily, a newspaper run by the Ministry of Agriculture. Drought is developing in northern China, it said.
Soybeans and corn gained in Chicago on speculation demand will increase. U.S. exporters sold 1.342 million tons of soybeans in the week ended Nov. 26, almost double the previous week, when prices fell 5.3 percent, the Department of Agriculture said yesterday.
Soybean Demand
China was the principal buyer.
Sales for delivery in the marketing year that began Sept. 1 are 19 percent higher than a year ago, government data show.
Soybeans for January delivery advanced 6.25 cents, or 0.5 percent, to $12.86 a bushel. The oilseed, headed for a 3.8 percent rally this week, has risen 23 percent this year on increased demand from China.
Corn for March delivery climbed 7 cents, or 1.3 percent, to $5.625 a bushel. The grain has added 1.7 percent this week and is up 38 percent since the end of July, partly because hot weather in August hurt U.S. crops.