March 6th, 2012

Wheat Futures – Wheat crops worldwide will probably decline 2 percent in the year starting July 1 as yields return to average after record production, said Australia’s government commodity forecaster.

Harvests may drop to 682 million metric tons from 693 million tons as consumption gains 0.3 percent to 681 million tons, the Canberra-based Australian Bureau of Agricultural and Resource Economics and Sciences said today. The world wheat indicator price will drop 7 percent to average about $275 a ton.

Wheat futures have tumbled 17 percent in the past year as global production and inventories headed for all-time highs and world trade surged to the second-highest level in at least in five decades. Global stockpiles may reach 220 million tons in 2012-2013 from 213 million tons a year earlier, Mike O’Dea, a senior risk manager at INTL FCStone Inc., said Feb. 22.

“If we see supply increasing more strongly than what it has and stocks continue to rise, that will put pressure on prices,” said Paul Morris, bureau executive director, in an interview yesterday.

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February 17th, 2012

Wheat futures rose after Egypt bought from U.S. inventories and corn gained on a Department of Agriculture report that showed overseas sales jumped last week. Soybeans also rose.

Egypt bought 180,000 metric tons of U.S. wheat at a tender yesterday, said Nomani Nomani, vice chairman of the General Authority for Supply Commodities. That added to the 55,000 tons bought from the U.S. on Feb. 11. U.S. corn sales in the week through Feb. 9 totaled 1 million tons, up 41 percent from the prior week, Department of Agriculture data show.

“The weekly U.S. export figures published yesterday by the U.S. Department of Agriculture are also providing tailwind” for prices, said Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt, in a report today. “The brightening of sentiment on the financial markets is also giving buoyancy to prices of grains and oilseeds.”

Wheat futures for May delivery gained 1.3 percent to $6.435 a bushel by 11:45 a.m. London time on the Chicago Board of Trade, taking gains for the most-active contract to 2.1 percent this week. Milling wheat for May delivery gained 1.1 percent to 208.25 euros ($273.47) a metric ton on NYSE Liffe in Paris.

Corn futures for May delivery climbed 0.7 percent to $6.44 a bushel in Chicago, taking gains for the most-active contract to 1.9 percent this week.

Soybean futures for May-delivery rose 0.5 percent to $12.7075 a bushel. The most-active contract is set for a 3.4 percent gain this week, the biggest since the five days ended Oct. 14.

Argentina’s soybean harvest may reach 43.5 million tons to 45 million tons, the Agriculture Ministry said yesterday. That compares with a 48 million-ton forecast by the U.S. Department of Agriculture on Feb. 9.

“Recent developments in the soybean market have so far buttressed” the bullish view on the oilseed in 2012, Abah Ofon, an analyst Standard Chartered Plc, said in an e-mail.

- Luzi Ann Javier in Singapore and Tony C. Dreibus in London at Bloomberg.

February 6th, 2012

Wheat futures gained for the first time in three sessions on speculation that cold weather in France, Germany and Ukraine will damage dormant crops.

Temperatures reached minus 15 degrees Celsius (5 degrees Fahrenheit) in France’s Alsace and Lorraine regions yesterday, according to forecaster Meteo France. In northern Germany, where some fields lack a protective layer of snow, soil temperatures have dropped below minus 8 degrees Celsius, Deutscher Wetterdienst said. Cold weather in the Black Sea region also has hurt crops.

“There’s been a lot of talk about the cold in Europe and in Russia and Ukraine,” Larry Glenn, an analyst at Frontier Ag in Quinter, Kansas, said in a telephone interview. “Traders still remember two years ago when everything was OK, then they had a terrible harvest. They remember how much any loss to production can mean to prices if it comes out of Europe and the Black Sea area.”

Wheat futures for March delivery gained 1.2 percent to close at $6.685 a bushel at 1:15 p.m. on the Chicago Board of Trade. The price, down 2 percent in the previous two sessions, has dropped 22 percent in the past 12 months.

Ukraine, the biggest grain grower in the Black Sea region after Russia, will need to replant at least half of its winter crops after freezing weather this week, Tetiana Adamenko, the head of agro-meteorology at the country’s national weather center, said on Feb. 3.

Damage known as winter kill caused by freezing weather will probably be average as snow cover protected some plants in parts of Bulgaria, where temperatures fell below minus 30 degrees Celsius, FCStone said in a report today.

The outlook for European soft wheat remains positive, and “there is little reason to believe that from a European perspective it will be greater than seasonal averages,” said Jaime Nolan-Miralles, an FCStone risk analyst.

- Tony C. Dreibus in London at Bloomberg.

Jan 31, 2012

Wheat futures rose in Chicago, heading for a second monthly gain, on speculation cold weather in Europe will hurt winter crops that lack protective snow cover. Corn and soybeans climbed.

Temperatures tomorrow may fall as low as minus 15 degrees Fahrenheit in Ukraine, Joel Burgio, a senior meteorologist at Telvent DTN, said in a report yesterday. That may damage plants that aren’t covered by snow. Prices also advanced as a Russian official said the country’s government will consider taxing grain exports.

“There’s a massive cold front coming through,” said William Adams, a portfolio manager at Resilience AG in Zurich. “Ukraine wheat production is expected to drop a bit, and that’s going to pressure wheat.”

Wheat futures for March delivery increased 1.9 percent to $6.57 a bushel by 1:15 p.m. London time on the Chicago Board of Trade. The most-active contract has gained 0.7 this month. Milling wheat for March delivery traded on NYSE Liffe in Paris rose 2.3 percent to 213.75 euros ($281.65) a metric ton.

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