July 30 (Bloomberg) — Wheat futures surged for a fourth day, set for the biggest monthly gain in almost three decades, on lingering concerns that drought in Russia and other parts of Europe will continue to curb global supply.
September-delivery wheat climbed as much as 1.3 percent to $6.355 a bushel on the Chicago Board of Trade, the highest price for a most-active contract since June 11, 2009. The contract traded at $6.335 a bushel at 10:30 a.m. Singapore time, set for a 32 percent gain this month, the biggest since August 1973.
Global wheat inventories will drop to 192 million metric tons by June 2011, from 197 million tons at the end of last month, as a “prolonged dry weather” reduces yield prospects in Russia, Kazakhstan, parts of Ukraine and northwestern areas of the European Union, the International Grains Council said yesterday. Last month, it forecast stockpiles would expand to 201 million tons.
U.S. exporters sold 919,894 tons of wheat as of the week ended July 22 for delivery in the year ending May 31, more than double a week earlier and up from 575,070 tons a year earlier, the U.S. Department of Agriculture said yesterday.
“Worsening drought conditions in Russia, better-than- expected U.S. wheat sales and the weaker U.S. dollar” pushed prices higher, Commonwealth Bank of Australia said today.
The Dollar Index, which tracks the value of the currency against six major counterparts including the yen, was little changed at 81.682 after declining for a second session yesterday.
Rough rice for September delivery added 0.6 percent to $10.20 per 100 pounds in Chicago, erasing an earlier loss of 0.4 percent. Prices are set for a 5 percent gain this month, the first rise for a most-active contract since April.
Rice futures have plunged 32 percent this year, compared with a 17 percent gain in wheat.
Switch to Rice
“In some countries like Bangladesh that do import wheat and rice, this may encourage them to switch to importing more rice,” United Nations Food and Agriculture Organization senior economist Concepcion Calpe said in a phone interview from Rome yesterday.
Bangladesh is the biggest wheat buyer in South Asia, according to the U.S. Department of Agriculture.
Rice futures lost their premium over wheat futures on July 15 for the first time since March 2008. A metric ton of wheat will buy 0.9667 ton of rice, according to today’s prices, swinging to a discount from an 84 percent premium on Feb. 3.
The FAO’s cereal-price index, which tracks prices of wheat, rice and corn, rose for the first time since December, gaining to 160.9 points in July from 151.7 a month earlier, the organization said on its website yesterday.
December-delivery corn, which competes with wheat as a main ingredient in livestock feed, gained as much as 0.8 percent to $3.97 a bushel in Chicago. It traded at $3.955 a bushel at 10:26 a.m. Singapore time, set for a 6 percent rise in July, the second monthly gain.
Soybeans for November delivery climbed as much as 0.8 percent to $9.955 a bushel, the highest price for the most- active contract since May 3. The contract last traded at $9.945 a bushel, set for a 10 percent gain this month.
– With assistance from Terry Barrett in Washington, Rudy Ruitenberg in Paris. Editors: Matthew Oakley, Jake Lloyd-Smith.
To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net
To contact the editor responsible for this story: Richard Dobson at rdobson4@bloomberg.net
