December-delivery wheat gained as much as 1.1 percent to $7.44 a bushel on the Chicago Board of Trade, and traded at $7.42 at 3:17 p.m. in Singapore. The contract slumped as much as 2 percent yesterday after Australia, the world’s fourth-largest exporter, said that shipments in the 2010-2011 season may be the second-highest on record as rains boosted the harvest.
Grain and oilseed-growing regions in the former Soviet Union will likely have “extremely dry conditions” through Sept. 20, hampering planting of the winter crop and the plants’ early development, Telvent DTN Inc. said in a forecast yesterday.
“Concerns remain throughout many Russian grain-growing regions, which are yet to see a sufficient increase in moisture to enable winter-wheat planting,” Commonwealth Bank of Australia said in a report e-mailed today.
Russia, the world’s third-largest grower in the past season, has banned grain exports until next year’s harvest after the worst drought in at least 50 years. The Russian restrictions on trade drove wheat to the highest price in 23 months in August.
Egyptian Purchases
Egypt plans to buy at least 55,000 metric tons in a tender today for shipment in November. The country is seeking supplies from the U.S., France, the U.K., Germany, Canada, Argentina or Australia, Nomani Nomani, vice chairman of the state-run General Authority for Supply Commodities, said yesterday.
Corn for December advanced for a fifth day -- the best series of gains since the five days to June 14 -- and rose as much as 0.5 percent to $4.975 a bushel. The grain has rallied 13 percent this month, outpacing wheat, as hedge-fund managers and large speculators increased bets on price gains in corn.
At today’s prices, a bushel of wheat will buy about 1.5 bushels of corn, compared with a 10-year average of 1.46. That difference has narrowed since Aug. 5, when the cost of wheat was almost double that of corn.
The net-long positions in corn, or difference between bets on gains and declines, in the week to Sept. 7 climbed 7 percent to 432,697 contracts on the Chicago Board of Trade, according to the U.S. Commodity Futures Trading Commission data. That’s the most since April 1996.
Global Estimate
Bets on gains surged three days before the U.S. Department of Agriculture released an estimate on the global supply and demand for corn, which indicated that stockpiles in the U.S., the largest exporter, will equal 9.8 percent of domestic consumption before next year’s harvest. That will be the smallest stockpiles-to-use ratio in 15 years.
If there were further setbacks during the U.S. harvest or unexpected demand from China or Russia, corn may advance to more than $5 a bushel, Luke Chandler, senior analyst at Rabobank International, said on Sept. 13.
China may import 3 million tons in the 2010-2011 season, Feng Lichen, general manager at Yigu Information Consulting Ltd., an independent grain-advisory company, said in Dalian yesterday. The nation has bought about 1.3 million tons of U.S. corn in the 2009-2010 season, the most 14 years.
China’s corn shortage will worsen as consumption outstrips supply, Fei Zhonghai, a manager at Cofco Ltd., said today at a conference in Dalian, as he estimated this year’s imports at 1.5 million tons.
Corn may rise to $5.25 a bushel as millers seek substitutes to wheat on the Russian grain-export ban and as rising meat consumption in China boosts feed demand, Peter McGuire, managing director at CWA Global Markets Pty., said by phone.
November-delivery soybeans climbed as much as 0.9 percent to $10.45 a bushel, before trading at $10.43.
Source: Bloomberg
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