US MIDDAY: Wheat surges
October 18, 2012: US wheat futures rose almost one percent on Wednesday, reversing three days of declines, as the dollar tumbled and on dryness that posed a threat to wheat fields in Australia and the United States, the two top global wheat exporters. Soyabeans also rose after plunging 17 percent to a 3-1/2 month low early in the week from record highs of nearly $18 per bushel set in early September.
And corn held firm but lacked bullish momentum with each market showing signs of choppy consolidating-type trading. At 10:15 am CDT (1515 GMT), Chicago Board of Trade December wheat was up 5 cents per bushel at $8.52-3/4, November soyabeans were up 4-1/4 at $14.98 and December corn was up 4-1/4 at $7.42-1/2.
Investors were reassured by credit rating agency Moody’s decision to maintain Spain’s investment-grade status, pushing the euro to a one-month high against the dollar and giving a boost to commodities traded in the US currency. “Grains are generally firming above Monday’s lows with the rest of the commodity complex,” said Arlan Suderman, senior market analyst for Water Street Advisory. Dry weather in several key global crop producing regions kept aggressive selling interest away from each market, especially the wheat market since key exporter Australia continues to suffer from very dry wheat conditions.
A Reuters poll of 10 analysts’ in early October showed Australia’s wheat production at 21.4 million tonnes, down more than one million tonnes from the government’s most recent estimate for 22.5 million. The poll showed wheat output falling 27 percent from last year’s record crop of 29.5 million as dry weather reduces yields. In its October crop report, the US Department of Agriculture (USDA) pegged Australia’s wheat exports for the 2012/13 marketing year at 18.0 million tonnes, below the forecast in September for 21.0 million.