Wheat rose for a second day on forecasts for declining global production caused by adverse weather in Russia and the European Union and on strong demand for grain from the U.S., the world’s largest exporter.
World output will total 644 million metric tons in the marketing year that ends in June, the International Grains Council said yesterday. That’s down 1.1 percent from a prior estimate. Exporters sold 3.8 million tons from U.S. inventories in the past three weeks, the most for a similar period in almost three years, government data show.
“The wheat market is still about the Russian rhetoric,” said Tom Leffler, the owner of Leffler Commodities LLC in Augusta, Kansas. “It’s not gotten better over there but it’s not worse. The wheat market is like a car race. We go to a car race to see a crash. We’re watching the wheat market to see a crash. What’s the next bullish move that’s going to appear?”
Wheat futures for December delivery rose 11 cents, or 1.6 percent, to $6.995 a bushel at 10:27 a.m. on the Chicago Board of Trade.
Before today, the price gained 43 percent since the end of June on concerns that global production would decline because of drought in Russia and dry weather followed by flooding in parts of Germany. The grain has dropped 1.8 percent this week, heading for a third straight weekly decline.
Wheat is the fourth-biggest U.S. crop, valued at $10.6 billion in 2009, behind corn, soybeans and hay, government data show