Wheat and corn rose in Chicago, heading for a second week of gains, on concern grain stockpiles may be too low to satisfy climbing demand.
World grain markets will face “continued tightness” next season even as production may increase, the International Grains Council said yesterday. Global cereal output will jump 4.6 percent to 1.805 billion metric tons in the year through June 2012, while consumption will advance 1.1 percent to 1.808 billion tons, it said.
“Carryover stocks could be quite tight, even as we’re looking to have almost record plantings this year from the States,” said Gary Mead, an analyst at VM Group in London.
Wheat for May delivery climbed 6 cents, or 0.8 percent, to $7.455 a bushel at 11:01 a.m. Londontime on the Chicago Board of Trade. Prices are up 3.1 percent this week. The grain fell the most since August on March 15 on concern the prior week’s earthquake in Japan might threaten demand.
“It’s remarkable how rapidly prices recovered after the selloff after the Japanese earthquake,” Mead said. “I’m not surprised, because the fundamentals for most of the grains are very strong.”
Milling wheat for May delivery traded on NYSE Liffe in Paris rose 6 euros, or 2.6 percent, to 235.75 euros ($333.77) a ton.
Chinese Purchase
China, the world’s biggest wheat consumer, bought 116,000 tons of the grain from the U.S. in the week ended March 17, the largest such purchase since July 2005, Department of Agriculture data showed yesterday. The amount was a “surprise,” said Larry Glenn, an analyst at Frontier Ag in Quinter, Kansas.
Corn for May delivery added 7.5 cents, or 1.1 percent, to $7.10 a bushel in Chicago. The grain, up 3.9 percent this week, touched $7.105, the highest price since March 9.
May-delivery soybeans rose 8.75 cents, or 0.6 percent, to $13.6325 a bushel. The oilseed was little changed for the week.
Food prices jumped to a record in February on rising commodity costs, the United Nations said this month. Corn and wheat may rise further as wet weather in the U.S. northern Plains curbs production of the grains, VM’s Mead said.
The northern Plains states of North Dakota, South Dakota and Minnesota are among the areas with an increased threat of flooding in the next few weeks, according to the National Oceanic and Atmospheric Administration. Excess rain there may trigger floods along the Red River of the North and the Mississippi and Minnesota rivers.
“It will delay the planting, and that is likely to lower yields, and farmers could run into early frost damage if we have late harvesting,” Mead said. “This is still the early stages of a bull market for corn and possibly for wheat.”
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