Wheat rose in Chicago, set for a fifth weekly gain, after Argentina said cold and drought hurt its crop and on speculation U.S. and European exports will be sustained. The grain reached a four-month high in Paris trading.
Argentina, the second-largest Southern Hemisphere wheat shipper after Australia, is predicting a 2013-14 wheat crop of 8.8 million metric tons after cold weather and a lack of rain damaged 100,000 hectares (247,105 acres). That compares with an International Grains Council forecast for 11 million tons.
“A pickup in demand and production worries around the world drive buyers,” Paul Georgy, Allendale Inc.’s president, wrote in a comment. “Traders are waiting for any indication Argentine wheat exports could be halted. This would place additional strain on tight U.S. hard red wheat carryover.”
Wheat for delivery in December added 1.5% to $6.965 a bushel on the Chicago Board of Trade when trading was paused at 7:45 a.m. Milling wheat for delivery in November traded on NYSE Liffe in the French capital touched 202.75 euros ($277.80) a ton, the highest since June 10, before trading up 1.1% at 201.75 euros.
Argentina’s wheat exports may fall to 2 million tons in 2013-14 from 3.1 million tons in the previous season and 11.4 million tons in 2011-12, the country’s Agriculture Ministry wrote in a report yesterday.
“The big news overnight” is the Argentine outlook, Dave Norris, an independent U.K. feed trader, wrote in an online comment. “They may be pretty close to the truth with this one. There’s been talk of production below 10 million tons lately.”
European Union soft-wheat export licenses in the current 2013-14 season jumped 71% from a year earlier to 8.02 million metric tons as of Oct. 15, the bloc reported yesterday. U.S. sales since June 1 were up 38% in annual terms as of Sept. 19, according to data published before the Oct. 1-16 partial government shutdown.
“Wheat will likely continue to be well supported for at least another four to six weeks as the U.S. and EU export pace remains elevated,” Ole Houe, director advisory services at Ikon Commodities Pty Ltd. in Sydney, said in an e-mail today.
Wheat slid 10% in Chicago and 19% in Paris this year on an outlook for a record harvest, with world production forecast by the U.S. Department of Agriculture last month to jump 8.2% to 708.9 million tons. The USDA was closed during the shutdown, leaving investors without reports on export sales of crops.
Australian farmers have started harvesting a 24.5 million- ton crop, 11% more than last year, the government estimates. Reaping in central Queensland is about 50% complete and may start early this year in central New South Wales, GrainCorp Ltd. said Oct. 14.
As Australia’s “harvest ramps up and the export pace from here picks up, we may well see pressure come back on global prices,” said Houe at Ikon.
Soybeans for delivery in November rose 0.4% to $12.985 a bushel in Chicago, set for a first weekly gain in three. Corn for delivery in December advanced 0.6% to $4.455 a bushel, also poised to climb for the week.