BLBG:Wheat Climbs on Speculation U.S. to Cut Global Supply Estimates
Wheat advanced for a second day on speculation that the U.S. may lower its forecasts for global supplies as dry weather damages crops from Russia to Australia.
World wheat supplies before next year’s Northern Hemisphere harvest may be 172.77 million metric tons, down 2.2 percent from last month’s estimate, according to analysts in a Bloomberg survey before the U.S. Department of Agriculture updates its forecast Oct. 11. Russia’s crop, which suffered from drought, may be 40 million tons, down from an earlier forecast of as much as 42 million tons, the Agriculture Ministry said today.
The USDA report “will be mildly supportive for wheat as we see decreasing global production and increasing U.S. demand,” Chris Gadd, a London-based analyst at Macquarie Group Ltd., wrote in a report today. Declining supplies in the former Soviet Union and Southern Hemisphere “will require that the U.S. has a very large export program in the second half of the season.”
Wheat for December delivery rose 0.9 percent to $8.69 a bushel by 5:27 a.m. on the Chicago Board of Trade. The most- active contract has surged 33 percent this year. In Paris, November-deliver milling wheat increased 0.6 percent to 261.25 euros ($338) a ton on NYSE Liffe.
Australia, the world’s second-biggest wheat exporter, cut its harvest forecast to 22.5 million tons on Sept. 11, 6.6 percent below an estimate in June, because of dry weather. The USDA projects that the country will produce 26 million tons, and Macquarie says it may be about 21 million tons.
Corn for December delivery gained 0.4 percent to $7.4525 a bushel. Soybeans for November delivery climbed 0.7 percent to $15.6175 a bushel. Both commodities have risen to records in the past two months after drought hurt U.S. yields.
The USDA may cut its outlook for the U.S. corn harvest to 10.616 billion bushels, compared with last month’s forecast of 10.727 billion, according to the Bloomberg survey. Soybean production may be 2.763 billion bushels, up from the previous projection of 2.634 billion, analysts said.
To contact the reporters on this story: Whitney McFerron in London at wmcferron1@bloomberg.net; Ranjeetha Pakiam in Kuala Lumpur at rpakiam@bloomberg.net
To contact the editor responsible for this story: John Deane at jdeane3@bloomberg.net
