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Wheat Soars as Dry Weather in U.S. Great Plains Threatens Crops
By Tony C. Dreibus
March 25 (Bloomberg) -- Wheat jumped 4.7 percent as dry weather in the southern U.S. Great Plains persisted, further reducing yield prospects for plants emerging from winter dormancy.
Parts of western Kansas, the Oklahoma Panhandle and West Texas have not had rain in the past two weeks, National Weather Service data show. Some areas are in a moderate drought, according to the U.S. Drought Monitor. Wheat prices have more than doubled in the past year, partly because adverse weather curbed global yields.
``They're having extreme dryness in the west and down south,'' said Jamey Kohake, a broker at Paragon Investments in Silver Lake, Kansas.
Wheat futures for May delivery rose 47.5 cents to $10.675 a bushel on the Chicago Board of Trade. The price reached a record $13.495 a bushel on Feb. 27 on speculation that global stockpiles will decline to the lowest in 30 years. The most- active contract gained 3.3 percent yesterday.
Wheat still has tumbled 8.3 percent in the past week. On March 20, Algeria and unidentified buyers canceled about 200,000 metric tons of purchases.
A storm last week that dropped heavy rain in the southeastern parts of Oklahoma and northern Texas missed the driest counties in the western parts of the states, a U.S. Department of Agriculture report said today.
World inventories were projected to fall to 110.4 million metric tons in the year ending May 31, the lowest since 1978, the USDA said on March 11. U.S. supplies may decline to 6.6 million tons, down 47 percent from a year earlier, the USDA said.
Australia, Canada
Last year, drought hurt plants in Australia and Canada, and an April freeze followed by excessive precipitation curbed yields in the U.S., the largest exporter of the grain. Canada is expected to be the second-biggest exporter followed by Russia, Argentina, Kazakhstan and Australia, U.S. government data show.
Wheat also gained as a strike by farmers in Argentina threatens to reduce production in the South American country. Protests by growers blocked entry to the country's main grain- shipping port of Rosario.
Wheat was the fourth-biggest U.S. crop in 2007, valued at $13.7 billion, behind corn, soybeans and hay, government data show.
Wheat may decline after the harvest of the winter crop in May and June because more growers seeded the grain to take advantage of higher prices.
The price may fall as low as $8 a bushel in the year that starts June 1, Hussein Allidina, an analyst at Morgan Stanley & Co. Inc., said in a report.
By Tony C. Dreibus
March 25 (Bloomberg) -- Wheat jumped 4.7 percent as dry weather in the southern U.S. Great Plains persisted, further reducing yield prospects for plants emerging from winter dormancy.
Parts of western Kansas, the Oklahoma Panhandle and West Texas have not had rain in the past two weeks, National Weather Service data show. Some areas are in a moderate drought, according to the U.S. Drought Monitor. Wheat prices have more than doubled in the past year, partly because adverse weather curbed global yields.
``They're having extreme dryness in the west and down south,'' said Jamey Kohake, a broker at Paragon Investments in Silver Lake, Kansas.
Wheat futures for May delivery rose 47.5 cents to $10.675 a bushel on the Chicago Board of Trade. The price reached a record $13.495 a bushel on Feb. 27 on speculation that global stockpiles will decline to the lowest in 30 years. The most- active contract gained 3.3 percent yesterday.
Wheat still has tumbled 8.3 percent in the past week. On March 20, Algeria and unidentified buyers canceled about 200,000 metric tons of purchases.
A storm last week that dropped heavy rain in the southeastern parts of Oklahoma and northern Texas missed the driest counties in the western parts of the states, a U.S. Department of Agriculture report said today.
World inventories were projected to fall to 110.4 million metric tons in the year ending May 31, the lowest since 1978, the USDA said on March 11. U.S. supplies may decline to 6.6 million tons, down 47 percent from a year earlier, the USDA said.
Australia, Canada
Last year, drought hurt plants in Australia and Canada, and an April freeze followed by excessive precipitation curbed yields in the U.S., the largest exporter of the grain. Canada is expected to be the second-biggest exporter followed by Russia, Argentina, Kazakhstan and Australia, U.S. government data show.
Wheat also gained as a strike by farmers in Argentina threatens to reduce production in the South American country. Protests by growers blocked entry to the country's main grain- shipping port of Rosario.
Wheat was the fourth-biggest U.S. crop in 2007, valued at $13.7 billion, behind corn, soybeans and hay, government data show.
Wheat may decline after the harvest of the winter crop in May and June because more growers seeded the grain to take advantage of higher prices.
The price may fall as low as $8 a bushel in the year that starts June 1, Hussein Allidina, an analyst at Morgan Stanley & Co. Inc., said in a report.
