May 4, 2012
Wheat prices up on reduced crop expectations
Wheat prices went up from a two-week slump in light of expected low world wheat production due to bad weather, leading to higher demand for supplies from the US, the world's top exporter.
Corn advanced, and soy fell from a 44-month high.
The global wheat harvest may slip 3.6% to 675.1 million tonnes, and stockpiles will slide 6.5% to 182.7 million tonnes, the United Nations' Food & Agriculture Organization said in a report. Shrinking wheat supplies may increase demand for corn in livestock feed.
"World wheat supplies will be smaller this year, and that will help to drive business to the US," said Mike Zuzolo, the president of Global Commodity Analysts & Consulting LLC in Lafayette, Indiana. "The supply of feed wheat for livestock has been depleted, and that should help to boost corn demand."
Wheat futures for July delivery climbed 0.2% to close at US$6.155 a bushel on the Chicago Board of Trade, the first gain in three days. The grain dropped to the lowest price since April 18 on speculation that rains will boost US production. The July contract on the Kansas City Board of Trade rose 0.4% to US$6.33 a bushel.
Corn futures for July delivery rose 0.5% to US$6.145 a bushel in Chicago, after falling 3.6% the past two days. The contract for December delivery, after the US harvest, fell 0.3% to US$5.295 on speculation that rain and warm weather this week will boost yields. Farmers told the government in March they intended to plant the most corn acres in 75 years.
Soy futures for July delivery fell 0.8% to settle at US$14.735 a bushel on the CBOT, after touching US$15.125, the highest since July 2008. The oilseed used to make animal feed and cooking oil has jumped 22% this year after hot, dry weather reduced production in South America.
Corn is the biggest US crop, valued at US$76.5 billion in 2011, followed by soy at US$35.8 billion, government figures show. Wheat is the fourth-largest at US$14.4 billion, behind hay.
