BLBG:Wheat Set for First Weekly Gain This Month on Dry U.S. Weather
Wheat is headed for the first weekly advance this month on concern that dry weather in growing regions in the U.S. and parts of Australia will curb output in the world’s two biggest exporters.
The grain for delivery in December traded little changed at $8.6775 a bushel on the Chicago Board of Trade at 1:46 p.m. Singapore time, set for a 1.3 percent gain this week. Wheat has risen 33 percent this year as the best performer on the Standard & Poor’s GSCI Spot Index of 24 raw materials.
Unusually dry weather prevailed over much of the Pacific Northwest causing some U.S. wheat farmers to wait for additional soil moisture before seeding their 2013 crop, while drought conditions in the northern Great Plains hampered winter wheat emergence, the government said in its weekly crop bulletin on Oct. 16. Western Australia will be mostly dry over this week, increasing the risk to the crop, Telvent DTN Inc. said yesterday.
“Ongoing crop concerns in many parts of the world supported sentiment,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, said today. “U.S. winter wheat crops in the northern plains are likely to be poorly established leading into dormancy because of low soil moisture reserves and delayed seedling emergence. And ongoing dryness in Western Australia is causing further cuts to yield prospects.”
Australia’s wheat production will probably drop to 21 million tons this marketing year, 1 metric million tons smaller than forecast in September, because of minimal rain in Western Australia, Rabobank International said in a report today. That compares with the government estimate of 22.5 million tons and a record harvest of 29.5 million tons in 2011-2012.
Corn for December delivery was little changed at $7.6025 a bushel in Chicago, set for a 1 percent gain this week. Soybeans for November lost 0.5 percent to $15.375 a bushel, set for a 1 percent weekly advance for the first such gain in five weeks.
To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
