September 5, 2007

 

US wheat sets new all-time highs

 

 

Wheat futures bolted to fresh record highs Tuesday (September 4) and closed limit-up in many contracts amid fears that drought may slash Australian production for the second year in a row, analysts said.

 

Unexpectedly large purchases from India also boosted wheat prices, analysts said.

 

Nearby Chicago Board of Trade (CBOT) September wheat traded as much as 43 cents higher during the day session and set an all-time high of US$8.10 a bushel. That exceeded the previous intraday high of US$8.05 a bushel. The contract, exempt from the typical 30-cent trading limit because it is in delivery, closed up 40 cents at US$8.07 a bushel.

 

Most-active CBOT December wheat closed limit-up, or 30 cents higher, at US$8.05 1/2 a bushel.

 

Amid historically tight global supplies, the trade is focused on threats to production in the Southern Hemisphere, analysts said. Hot, dry weather has dogged Australia's developing wheat crop, and forecasts show little chance of significant rain in the next week.

 

The US Department of Agriculture last month pegged Australia's wheat production at 23 million tonnes, but private growers estimate output will be significantly lower. One Australian wheat grower warned production could even drop to 10 million tonnes, about the same as last year, unless widespread, heavy rains fall this month.

 

Kansas City Board of Trade December wheat closed 30 cents stronger at a new high of US$7.61 1/4 a bushel, exceeding the previous high of US$7.50 a bushel. Minneapolis Grain Exchange December wheat also settled limit-up at US$7.41 1/2 a bushel.

 

With wheat futures up sharply, there were also gains for soybean and corn contracts on the CBOT.

 

In soybean trading - where prices jumped to seven-week highs with additional help from technical buying and tightening supply forecasts - September soybeans settled 24 1/2 cents higher at $8.92 1/2 a bushel, and November soybeans finished 25 cents stronger at $9.07 1/2 a bushel. September soymeal settled US$8.10 higher at US$247.90 a short tonne, and December soymeal settled US$8.90 higher at US$254.60 a short tonne. September soyoil ended 0.65 cent higher at 37.19 cents a pound, and December soyoil finished 0.76 cent stronger at 37.87 cents a pound.

 

September corn settled 12 3/4 cents higher at US$3.36 3/4 a bushel, December corn rose 13 1/4 cents to US$3.53 1/4 a bushel, and March corn also rose 13 1/4 cents to US$3.69 1/4 a bushel.