Wheat Gains for Second Day on Australian, Russia Crops

By Chanyaporn Chanjaroen  Oct 28, 2014
Bloomberg
Wheat advanced for a second day on concern that harvests in Australia and Russia may drop because of extreme weather. Soybeans fell from a seven-week high.
Wheat for December gained 0.5 percent to $5.2525 a bushel on the Chicago Board of Trade at 1:26 p.m. in Singapore. That took this month’s gains to 10 percent, the most for a most-active contract since March.
The grain rebounded from a four-year low in September as excessive rain in Australia and dryness in Russia spurred concern that output from both major producing countries may drop. Global wheat production is set to reach a record 721.12 million metric tons, the U.S. Department of Agriculture said Oct. 10. The global oversupply will limit any rally, according to Wayne Gordon, an analyst at UBS AG.
“Russia is clearly signaling its winter-wheat crop is not in prime condition,” and weather conditions in Australia may curb the crop there, Gordon said from Singapore. “Still, I cannot be bullish on wheat. There’s plenty of grain around.”
Australia’s harvest may drop to 22.7 million tons in 2014-2015, the lowest level in five years, Paris-based adviser Agritel said yesterday. Dry conditions across European Russia will probably cut that country’s harvest to less than 50 million tons in 2015, according to researcher SovEcon.
Russia will be the world’s biggest exporter of the grain after the European Union and the U.S. this season, according to the USDA. Australia is the world’s fifth-largest shipper.
Soybeans for January delivery dropped as much as 0.6 percent to $10.065 a bushel and traded at $10.095. The oilseed rallied as much as 3.2 percent to $10.15 yesterday, the highest price since Sept. 8, after U.S. government data showed exports for inspection climbed for a record eighth straight week.
Corn for December delivery advanced 0.4 percent to $3.645 a bushel in Chicago after climbing 2.8 percent yesterday, the biggest gain since Oct. 14.
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