BLBG:Wheat Gains as Declining Crop Conditions Threaten Supply
Wheat rose in Chicago and Paris on speculation that global supplies will tighten as crop conditions deteriorate in the U.S. because of dry weather while rain delays planting in parts of Europe.
About 39 percent of the U.S. winter wheat crop was in good or excellent condition as of Nov. 4, the worst for the week since record-keeping began 27 years ago, the U.S. Department of Agriculture said Nov. 5. The French soft wheat crop was 64 percent planted as of Oct. 29, compared with 88 percent last year, crops office FranceAgriMer said Nov. 2. In the U.K., about 70 percent to 75 percent of wheat has been planted, according to crop-quality service CropMonitor.
“The wheat market now looks to have a clear sense of direction and could grind higher with poor winter wheat crop condition in the U.S. and delayed French and U.K. plantings providing a supportive backdrop,” Jaime Nolan-Miralles, an INTL FCStone Inc. commodity risk manager in Dublin, said today in an e-mailed report. “The macro uncertainty surrounding U.S. elections will now dissipate.”
Wheat for delivery in December rose 0.6 percent to $8.825 a bushel by 4:38 a.m. on the Chicago Board of Trade, after climbing to $8.83 a bushel, the highest since Oct. 25. In Paris, milling wheat for January delivery gained 1 percent to 274.25 euros ($352.47) a metric ton on NYSE Liffe, after touching 274.50 euros, the highest ever for the contract.
Corn for December delivery rose 0.3 percent to $7.4325 a bushel in Chicago and soybeans for January delivery were little changed at $15.1525 a bushel.
Prices also climbed on expectations Barack Obama’s re- election as president means the Federal Reserve will continue monetary stimulus, weakening the dollar and boosting demand for commodities, said Michael Creed, an agribusiness economist at National Australia Bank Ltd.
“We’ll likely see the continuation of a loose monetary policy,” Creed said by phone from Melbourne today. “That pushes down the value of the dollar and raises risk appetite, which generally is supportive of commodities.”
To contact the reporters on this story: Whitney McFerron in London at wmcferron1@bloomberg.net; Luzi Ann Javier in Singapore at ljavier@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
