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IKAR in Mass Media

GRAINS-Wheat hits 22-month high on Black Sea woes

10 сентября 2010 года

CHICAGO, (Reuters) - U.S. wheat futures surged to a22-month high Wednesday as drought concerns deepened in the Black Sea region and the United Nation's food agency cut its global wheat forecast by 4 percent.Chicago Board of Trade wheat futures rose nearly 7 percent, ending at $7.25-3/4 per bushel, the highest price since September 2008, as the worst drought in 130 years spurred a round of buying from traders.

Corn and soybean futures followed as CBOT September corn gained 2.76 percent to end at $4.00-1/4 while bellwether November soybeans climbed 6-1/4 cents to $10.24-1/4. Lightly traded spot August soybeans eased a 1/2 cent to $10.53.

Wheat had its largest one-day gain since July 15 and surpassed lean hog futures as the best performer this year in the Reuters Jefferies CRB Index "You've got the speculative sector heavily invested in this rally and they are going to defend those positions in the short term rather than turn around and liquidate them," said Shawn McCambridge, analyst at Prudential Bache Commodities in Chicago.

"You have to keep this market well fed with news and that's what it's getting right now," he said.

The UN's Food and Agriculture Organization on Wednesday chopped 25 million tonnes from its last global wheat estimate in June before the drought.

The FAO said the drought will reduce wheat output in Kazakhstan and Ukraine after planting troubles cut acreage in Canada, bringing world wheat supplies to 651 million tonnes.

The drought may also put at risk next year's winter grain crop, said the head of the Institute for Agricultural Market Studies (IKAR) analysts.

"If there are not heavy rains in the next two weeks, the winter sowing is a big question," Dmitry Rylko told Reuters Insider television Wednesday.

The drought in the Black Sea region is expected to affect world wheat trade, with key exporters such as Australia and the United States gaining market share as drought-stricken countries reap smaller crops. Traders said some Black Sea shipments to Asia had already been held up.

The Russian government said on Tuesday that no Russian export curbs were needed. Ukraine on Wednesday also said it planned no export halt.

"In view of the massive crop failures there might be a strong decline in exports and sporadic delivery failures anyway, even without an officially imposed export stop," Commerzbank said in a report. "Furthermore, it can not be excluded that such a step might be taken at a later point of time in order to curb inflation."

RUSSIAN STILL EXPORTING

Russian wheat prices are soaring amid the drought concerns, but the major exporter's grain remains competitive in world markets.

The main grain buyer for Egypt, the No. 1 world wheat importer, said Wednesday that it bought 180,000 tonnes of Russian wheat in its second big purchase in a week. Wednesday's purchase was $9 to $40 per tonne higher than its last purchase on Saturday.

Meanwhile, Jordan on Wednesday bought only half of a planned purchase of 100,000 tonnes of wheat due to high prices for Black Sea wheat.

In Chicago, investment funds bought a hefty 14,000 wheat contracts on Wednesday. traders said.

"Even though the U.S. didn't get any of the Egyptian business, the beat goes on and the money keeps flowing in," a CBOT wheat trader said.

Corn and soybean futures gained, too, despite relatively favorable weather for both crops in the U.S. Corn Belt. Hot weather in the U.S. Delta, which typically harvests the year's first soybeans, was mildly supportive, however.

"We're following the wheat market, everything else is secondary right now," Joe Bedore, CBOT floor manager for trade house FC Stone, said from the corn trading pit.

Additional reporting by Michael Hogan in Hamburg, Naveen Thukral in Singapore and Sam Nelson and Karl Plume in Chicago; Editing by Sofina Mirza-Reid

Source: Reuters  |  #grain   |  Comments: 0   Views: 39

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