Wheat futures advance on speculation cold weather may affect US Crop

Wheat futures rose to the highest in more than a week on speculation yields in the US, may decline as cold weather threatens to damage the crop, curbing global supply next year.

Wheat for July delivery rose as much as 0.5% to US$5.1325 a bushel in after-hours electronic trading on the Chicago Board of Trade, extending yesterday's (May 4) 1.8% advance. The contract added 0.2% at US$5.115 a bushel at 9:43 a.m. Singapore time.

Forecast cold weather in US central and south plains may damage winter-wheat if temperatures fall below freezing for a few hours, Joel Burgio, an agricultural meteorologist at Telvent DTN Inc., said in a report. Yields from hard-red winter wheat fields in northern Kansas and southern Nebraska may drop 1.45 %, according to samples taken on the first day of the annual Wheat Quality Council tour.

''Wheat is starting to look more bullish than bearish,'' Peter McGuire, managing director at CWA Global Markets Pty. said. September-delivery wheat may rise as high as US$5.50 a bushel fairly shortly. The contract gained 0.2 % to $5.275 a bushel today (May 5).

Yields from hard-red winter wheat fields in northern Kansas and southern Nebraska may drop to 40.7 bushels an acre, from 41.3 bushels in 2009, according to random samples of 213 fields collected yesterday, the first day of the annual Wheat Quality Council tour. Kansas accounted for 26% of total harvested areas in the US last year, according to the nation’s Department of Agriculture.

Global wheat stockpiles may decline to 191.5 million tonnes in the 2010-2011 year, from 195.82 million tonnes this year, Joe Victor, vice president at Allendale Inc., a McHenry, Illinois-based commodity market researcher and brokerage, said in an e-mail. Still, that will be the second-largest global inventory since 2001-2002, he said.