Drought means rising wheat price

Bloomberg: Wheat advanced for a second day on speculation that demand for U.S. supplies may increase after the International Grains Council lowered its global production forecast. Corn also gained. The December-delivery wheat contract climbed 1 percent to $6.9525 a bushel as of 6:24 a.m. on the Chicago Board of Trade, paring a third weekly decline.

The global wheat harvest may be 644 million metric tons, 1.1 percent lower than last month’s estimate and less than record demand of 657 million tons, the London-based group said in a report yesterday. Dry weather in Russia, Ukraine and Australia and excessive rain in parts of the European Union drove prices more than 50 percent higher since the end of May.

“News in the last 48 hours have been supportive,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia. The reduction in the global wheat output forecast and an increase in the estimate for demand boosted prices, he said.

Prices also rose because of the prospect of grain imports by Russia, Mathews said by phone from Sydney. Russia may import as much as 6 million tons of grain in the marketing year that ends in June after the country’s worst drought in 50 years, SovEcon Managing Director Andrei Sizov Jr. said yesterday. Wheat imports may total 1.5 million tons, while barley deliveries may be 1.8 million, Sizov wrote….

A wheat field, shot by 3268zauber, Wikimedia Commons, under the Creative CommonsAttribution-Share Alike 3.0 Unported license