wheat futures jump to 13 month highs

Wheat Futures Jump to 13-Month High on Europe Drought; Corn, Soybeans Gain
By Jeff Wilson - Jul 29, 2010

Wheat futures surged to a 13-month high and corn and soybeans rose as drought damages crops in Russia, Ukraine and other parts of Europe, increasing demand for supplies from the U.S., the worlds biggest exporter.

Ukraine, the third-largest exporter of feed grains and fifth-largest wheat shipper, may limit exports, Agriculture Minister Mykola Prysyazhnyuk said today. In Russia, record high temperatures may cut field-crop production 25 percent, Moscow- based researcher SovEcon said yesterday. The price of European milling wheat jumped as much as 5.1 percent today in Paris.

There is rising anxiety among importers about global shrinking supplies said Roy Huckabay, the executive vice president of the Linn Group in Chicago. We havent had a global tender for wheat since last week, so no one knows the current value of wheat.

Wheat futures for September delivery jumped 20.5 cents, or 3.4 percent, to close at $6.155 a bushel at 1:29 p.m. on the Chicago Board of Trade. Earlier, the price reached $6.2325, the highest level since June 12, 2009.

Corn futures for December delivery surged 13.75 cents, or 3.6 percent, to close at $3.9075 a bushel at 1:30 p.m. on the CBOT, the biggest gain for the most-active contract since June 30. The commodity has gained 14 percent since June 29, the day before the government said U.S. farmers planted less this year than they had planned.

Soybean futures for November delivery climbed 12.5 cents, or 1.3 percent, to close at $9.78 a bushel at 1:34 p.m. in Chicago, the biggest gain since July 15. The most-active contract has advanced 8.4 percent this month.

Grain output in Poland, the European Unions largest producer behind France and Germany, may slump 7 percent to 10 percent this year, to 25.1 million metric tons to 26.1 million tons, because of smaller plantings and poor weather, the Warsaw- based Central Statistical Office said today in an e-mailed statement.

Asian buyers are looking to replace supplies usually purchased from nations in Europe and the former Soviet Union, Huckabay said. Wheat and feed-grain production may fall 11 percent to 163.4 million tons this year in the former Soviet Union from 181.7 million last year, the U.S. Department of Agriculture said on July 9.

U.S. corn is the cheapest feed grain for Asian buyers, Huckabay said.

Corn is the biggest U.S. crop, valued at $48.6 billion in 2009, followed by soybeans, hay and wheat, government figures show.

http://www.bloomberg.com/news/2010-07-28/wheat-futures-jump-to-13-month-high-on-europe-drought-corn-soybeans-gain.html