Wheat futures rose the most in two weeks on speculation that demand will increase for U.S. exports as wet weather erodes grain quality in
Australia.
The worst floods in 50 years in the Australian state of Queensland may delay wheat deliveries carried by rail by as much as two weeks, according to GrainCorp Ltd., the eastern region’s largest grain handler. About half of the nation’s crop may get a lower quality grade after excessive rains swamped eastern fields, National Australia Bank Ltd. has estimated.
“The market continues to assess the overall impact of the poor conditions in Australia, and the improvement in U.S. prospects going into 2011 with additional export-market share,” said
Shawn McCambridge, the senior grain analyst for Prudential Bache Commodities LLC.
Wheat futures for March delivery rose 19 cents, or 2.4 percent, to settle at $8.0825 a bushel at 1:15 p.m. on the
Chicago Board of Trade, the biggest gain since Dec. 22. The commodity jumped 47 percent last year as adverse weather cut world output and demand increased for U.S. supplies.
Libya is seeking to buy 85,000 metric tons of milling wheat in international markets, Paris-based farm adviser Agritel said on its website today. Algeria is seeking 50,000 tons of soft wheat, two traders involved in the tender said.
The U.S. is the world’s largest exporter, followed by France, Canada and Australia, according to the International Grains Council and FrancAgriMer.
U.S. Plains
Futures also rose on renewed concern that dry weather in the Great Plains will curb U.S. harvests later this year, said Brian Hoops, the president of Midwest Market Solutions. About 27 percent of crops in
Kansas, the largest winter-wheat producer, were in good or excellent condition last month, down from 37 percent at the end of November, according to the U.S. Department of Agriculture.
“Winter wheat in the Plains is going to remain very dry,” Hoops said from Yankton,
South Dakota. “If there’s no snow cover, and you get a freezing situation, it could be something the crop can’t recover from.”
Western Kansas and eastern
Colorado had less than half of the normal amount of precipitation in the past 30 days, said Drew Lerner, the president of World Weather Inc. in
Overland Park,
Kansas. The region may get as much as 3 inches (7.6 centimeters) of snow over the weekend, he said.