Wheat remains higher

October 05, 2013

United States Wheat
United States Wheat

US wheat rose for a third straight session on Thursday, hitting a 3-1/2 month high and increasing its premium over corn to the largest in more than three years amid strong export demand and supply risks in major producing countries. Profit-taking late in the trading session took wheat off its highs, while farmer selling and an active planting pace in the southern US Plains also limited gains, traders said. “In the near term, it’s going to be hard to feed the bull,” said Mike Zuzolo, analyst at Global Commodity Analytics.

Soyabean futures jumped 1 percent and corn edged slightly higher, with soya rebounding from a 19-month low and corn a three-year low hit amid ongoing harvests of big US crops and plentiful global supplies. The United Nations’ Food and Agriculture Organisation said global food prices were the lowest in three years even as the agency reduced its global wheat forecast due to poorer prospects for South America’s crop.

Chicago Board of Trade wheat for December delivery settled 3-1/4 cents higher at $6.89-1/4 per bushel after earlier rising as high as $6.98 – the highest level since June 21. Kansas City Board of Trade wheat gained for the ninth straight day – the longest streak of higher prices since December 2011 – but futures briefly traded lower before finishing a 1/2 cent higher at $7.55.

US farmers were said to have sold old-crop wheat supplies during Thursday’s session, while growers have planted almost half of the new-crop winter wheat crop. “We are seeing some follow-though technical buying. The FAO numbers that came out reduced global wheat production in another reminder that we are still seeing problems in South America, particularly Argentina,” said Terry Reilly, analyst at Futures International.

Lower output in Argentina led its neighbor Brazil to ramp up wheat purchases from the United States. Brazil’s wheat crop was also damaged by frost. Additionally, top wheat grower China increased imports of US wheat to stem a domestic shortfall. “US wheat stocks are fairly tight, and from the global perspective the tone of stories has been relatively friendly for the market,” said Brett Cooper, senior markets manager at INTL FCStone Australia.

Rains in the United States were expected to stall the harvest of a record-large corn crop and the fourth largest soyabean crop on record. The big harvests earlier this week pressured corn prices to a three-year low and soyabeans to a 19-month low. CBOT December corn ended 1/4 cent higher at $4.39-1/4 per bushel. Soyabeans for November delivery were up 13-1/4 cents at $12.88-1/4, lifted for the second straight session by 2 percent gain in soyameal futures. Courtesy: Reuters

Published in ZaraiMedia.com

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