Wheat Gains for an Eighth Day in Paris on Concern About Weather
July 08, 2010
By Rudy Ruitenberg and Luzi Ann Javier
July 8 (Bloomberg) – Wheat rose for an eighth day in Paris on concern that hot, dry weather in Russia, Kazakhstan and western Europe may cut production. Prices slipped in Chicago.
Milling wheat for November delivery climbed as high as 164.25 euros ($207.89) a metric ton, the highest level since June 2009, on NYSE Liffe. The contract was up 1.7 percent at 163.50 euros at 12:37 p.m. local time. September-delivery wheat fell 0.2 percent to $5.2925 a bushel on the Chicago Board of Trade.
Russia’s wheat crop may drop this year because of drought, the Institute for Agricultural Market Studies said yesterday. France will reap less wheat this year than forecast by the government, according to farm adviser Agritel. The Kazakh grain harvest may fall as much as 36 percent from last year’s record, Deputy Agriculture Minister Arman Yevniyev said.
“In Russia, the very strong heat and the lack of rain in the Volga region and all of the southern Urals create fear for the yields,” Bourges, France-based farm consultant Offre et Demande Agricole said in an e-mailed report today. “Elsewhere, it continues to be warm in France.”
The grain crop in Kazakhstan, Central Asia’s biggest wheat exporter, may drop to between 14.5 million and 15.5 million tons this year from 22.7 million tons in 2009, state-owned Kazinform cited Yevniyev as saying today. The Russian harvest may come to 55 million tons, down 3.5 percent from a June 28 estimate, the institute said.
Wheat in Russia’s Volga District, which produces a quarter of the country’s output, is suffering from drought after temperatures exceeded 95 degrees Fahrenheit (35 degrees Celsius), Martell Crop Projections said in a July 6 report.
“Downgrades to Black Sea and western Europe wheat crops and also wet weather in the U.S. have aided the market mentality over the past couple of weeks,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, said by phone from Sydney today.
Chicago-traded wheat slid as much as 1.1 percent, ending the longest rally since November on speculation that increased output in the U.S., the largest shipper, will add to supplies.
The USDA is scheduled to release its latest estimate on agricultural global supply and demand, including wheat, corn and soybeans, tomorrow in Washington.
“Over time, I do expect the market to correct lower on the back of higher global supplies,” Mathews said. Still, the decline will be “contingent on what the USDA actually has to say come Friday,” he said.
December-delivery corn rose 0.1 percent to $3.8975 a bushel, while soybeans for November delivery added 0.2 percent to $9.34 a bushel.
Excessive rains in some parts of the U.S. Midwest may result in some “soybean acreage not getting planted,” Telvent DTN Inc. said in a forecast yesterday. The Midwest is the largest U.S. corn- and soybean-growing region.
A wave of low pressure moving north from the Gulf of Mexico may bring heavier rainfall toward the end of the week, Accuweather.com said yesterday.
-With assistance from Jeff Wilson in Chicago, Kateryna Choursina in Kiev, Nariman Gizitdinov in Almaty and Halia Pavliva in New York. Editor: Jake Lloyd-Smith