BLBG:Wheat Gains, Corn Rebounds From Longest Slump on Demand Outlook
Wheat advanced for a second day in Chicago, while corn rebounded from the longest losing streak in 32 years on speculation that slumps from last year’s peaks will boost demand for U.S. supplies. Soybeans also gained.
Wheat for delivery in March gained as much as 0.5 percent to $7.3925 a bushel on the Chicago Board of Trade, and was at $7.38 at 9:12 a.m. in Singapore. Milling wheat for delivery in May settled at 236.75 euros ($318.41) a ton yesterday, making it $47.24 more expensive than a ton of Chicago wheat, compared with an average of $16.42 in the past decade.
“Chicago wheat is now the cheapest wheat,” Michael Pitts, a commodity sales director at National Australia Bank Ltd., said from Sydney today. “That’s going to attract some demand. Demand has still been decent for global wheat generally.”
Wheat plunged 22 percent from a four-year high through yesterday, while corn slumped 17 percent from its all-time closing high as global production prospects improved after the worst U.S. drought since the 1930s hurt crops.
Iraq is seeking to import 50,000 tons of wheat at a bidding that closes Feb. 17, the Trade Ministry said Jan. 31. Japan plans to buy feed-wheat on Feb. 20, while Bangladesh, the largest buyer in South Asia, is seeking to import 50,000 tons at a bidding that closes Feb. 28.
Corn for May delivery rose 0.2 percent to $6.9475 a bushel in Chicago, ending nine days of declines. Soybeans for May delivery gained 0.1 percent to $14.155 a bushel in Chicago. That put soybeans at 2.04 times the cost of corn, compared with an average of 2.4 in the past decade.
Production of ethanol in the U.S. last week rose 1.9 percent to 789,000 barrels a day, the biggest jump in five weeks and the highest level since Jan. 18, the Energy Information Administration said in a report yesterday.
“A couple of facilities have restarted, which is positive” for corn, Pitts said. “We’re coming off a relatively low level” of ethanol output, and “the market will focus more on rains improving production prospects in parts of South America and the U.S.,” he said.
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
