Tuesday, 9 October 2012

Wheat Climbs on Speculation U.S. to Cut Global Supply Estimates

By Ranjeetha Pakiam - Oct 9, 2012
Bloomberg
Wheat advanced for a second day on speculation that the U.S. may lower its forecasts for global supplies as dry weather damages crops from Russia to Australia.

Wheat for December delivery rose as much as 0.9 percent to $8.685 a bushel on the Chicago Board of Trade and was at $8.6775 at 1:40 p.m. Singapore time. The most-active contract has surged 33 percent this year.

World wheat and corn inventories before next year’s Northern Hemisphere harvests probably will be smaller than forecast by the U.S. Department of Agriculture last month, according to the average estimates of as many as 13 analysts surveyed by Bloomberg News. A neutral-to-bullish report was expected for corn and wheat with 2012-2013 beginning stocks and production set to fall, Morgan Stanley wrote in a report yesterday. The USDA is scheduled to release its forecasts on Oct. 11 in Washington.

“Wheat fundamentals are bullish in the short-term with global supply estimates being revised down,” Rabobank International said in a report e-mailed today. Supply estimates may be lowered further in October as U.S. export sales continue to be above trade estimates, the bank said.

The USDA said last month that Australia, the world’s second-biggest exporter, would harvest 26 million metric tons. The agency may lower its estimate on Oct. 11 to reflect the Australian government’s Sept. 11 forecast of 22.5 million tons, Morgan Stanley said.

“Reduced export availability from the Black Sea region due to the effect of drought coupled with a deteriorating Australian crop outlook is expected to add support to the wheat complex,” Rabobank said.

South Korean feed group FLC will buy 55,000 tons of wheat for arrival by Jan. 20, 2013 and issued a tender to import as much as 65,000 tons of corn for delivery by April 1, 2013, according to an e-mailed tender notice. Bidding is set for 4:30 p.m. Seoul time today.

Corn for December delivery gained as much as 0.4 percent to $7.4475 a bushel, before trading at $7.4275. Soybeans for November delivery climbed as much as 0.4 percent to $15.57 a bushel and were at $15.56.

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