Wheat headed for the biggest weekly drop in more than two years in Chicago after the U.S. unexpectedly raised its global supply estimate. Rice and corn also declined on forecasts for bigger supplies.
Global wheat inventories will total 181.9 million metric tons at the end of the marketing year on May 31, up 2.3 percent from last month’s estimate, the U.S. Department of Agriculture said yesterday. Analysts surveyed by Bloomberg News had forecast stockpiles would decline to 177.56 million tons. Corn and rice inventory estimates also climbed.
“The USDA pointed to inventory stabilization, with small inventory builds for most crops,” Goldman Sachs Group Inc. analyst Damien Courvalin said in a report. “We believe that this stabilization will put a lid on crop prices in the short term. With the market focus shifting to the likely 2011-2012 supply response, we actually see downside risk to crop prices in the near term.”
Wheat for May delivery slid 14 cents, or 1.9 percent, to $7.265 a bushel at 10:06 a.m. London time on the Chicago Board of Trade. The grain is down 13 percent this week, on course for the biggest decline since December 2008.
Source
Saturday, March 12, 2011
Thursday, February 24, 2011
Speculators Flee Wheat on Middle Eastern Unrest
Wheat extended a collapse and corn and soybeans also fell as traders speculated that a jump in energy costs caused by protests across North Africa and the Middle East will curb growth and demand for grains.
Riots already ousted leaders in Egypt, the world’s biggest wheat importer, and in Tunisia, and opposition groups have seized control of eastern cities in Libya. While wheat traded in Chicago dropped 11 percent in the past four sessions, crude oil jumped 13 percent on the New York Mercantile Exchange.
Grain prices surged last month as North African and Middle East nations bought more shipments to damp a surge in domestic prices that helped spark the protests from Morocco to Bahrain. Speculators including hedge funds last week cut their bets on higher wheat prices by 20 percent, U.S. Commodity Futures Trading Commission data show.
“Investors continue to exit grain positions in favor of energy and financial markets due to anxiety over political unrest in the Middle East and North Africa,” Jim Gerlach, president of A/C Trading Inc., said by phone from Fowler, Indiana. “The markets are focused on the negative impact that higher energy prices may have on the global economy and food demand.”
Full Story
Riots already ousted leaders in Egypt, the world’s biggest wheat importer, and in Tunisia, and opposition groups have seized control of eastern cities in Libya. While wheat traded in Chicago dropped 11 percent in the past four sessions, crude oil jumped 13 percent on the New York Mercantile Exchange.
Grain prices surged last month as North African and Middle East nations bought more shipments to damp a surge in domestic prices that helped spark the protests from Morocco to Bahrain. Speculators including hedge funds last week cut their bets on higher wheat prices by 20 percent, U.S. Commodity Futures Trading Commission data show.
“Investors continue to exit grain positions in favor of energy and financial markets due to anxiety over political unrest in the Middle East and North Africa,” Jim Gerlach, president of A/C Trading Inc., said by phone from Fowler, Indiana. “The markets are focused on the negative impact that higher energy prices may have on the global economy and food demand.”
Full Story
Drought Increases Chinese Wheat Demand
DROUGHT across five provinces responsible for more than half China's 100 million tonne wheat crop could trigger a major foray into global markets - including Australia - by a nation which prides itself on being largely self sufficient in wheat.
Shandong Province, which traditionally grows 20 per cent of China's wheat, is facing its worst drought in 200 years. In other areas the big dry is the worst in 60 years.
Chinese Government agency, Cofco, is understood to have already bought about 200,000 tonnes of feed wheat from Australia this year, while other grain purchases around the world have also begun.
Although a regular and significant importer of soybeans and some corn, China has been relatively self-sufficient in wheat for two decades, but now has about 6.75 million hectares of key wheat country in drought according to its Office of State Flood Control and Drought Relief.
The Chinese government is spending about $1 billion to boost emergency water supply and irrigation resources in drought areas.
Full Story
Shandong Province, which traditionally grows 20 per cent of China's wheat, is facing its worst drought in 200 years. In other areas the big dry is the worst in 60 years.
Chinese Government agency, Cofco, is understood to have already bought about 200,000 tonnes of feed wheat from Australia this year, while other grain purchases around the world have also begun.
Although a regular and significant importer of soybeans and some corn, China has been relatively self-sufficient in wheat for two decades, but now has about 6.75 million hectares of key wheat country in drought according to its Office of State Flood Control and Drought Relief.
The Chinese government is spending about $1 billion to boost emergency water supply and irrigation resources in drought areas.
Full Story
Saturday, January 29, 2011
Wheat Prices Fall Most in Two Months
Wheat fell the most in two months as the cost of the commodity may slow demand for U.S. supplies. Corn prices also dropped.
Wheat has soared 70 percent in the past year as bad weather damaged crops in Canada, Australia and Russia. U.S. export sales fell 13 percent in the week ended January 20 from a week earlier, Department of Agriculture data revealed. Speculators have cut back on bets on rising prices in each of the past three weeks, U.S. government data reveal.
Wheat futures for March delivery declined 20.5 cents, or 2.4 percent, to $8.2575 a bushel at 1:15 p.m. on the Chicago Board of Trade, the biggest decline since Nov. 16. The wheat price jumped 0.2 percent this week.
Prices also dropped on concerns that riots in Egypt, the world’s biggest buyer, will slow down on purchases.
Corn futures for March delivery fell 6.75 cents, or 1 percent, to $6.445 a bushel in Chicago. The price declined 2 percent this week.
Soybeans for March delivery fell 1.5 cents, or 0.1 percent, to $13.98 a bushel. The most-active contract declined 1 percent this week.
Wheat has soared 70 percent in the past year as bad weather damaged crops in Canada, Australia and Russia. U.S. export sales fell 13 percent in the week ended January 20 from a week earlier, Department of Agriculture data revealed. Speculators have cut back on bets on rising prices in each of the past three weeks, U.S. government data reveal.
Wheat futures for March delivery declined 20.5 cents, or 2.4 percent, to $8.2575 a bushel at 1:15 p.m. on the Chicago Board of Trade, the biggest decline since Nov. 16. The wheat price jumped 0.2 percent this week.
Prices also dropped on concerns that riots in Egypt, the world’s biggest buyer, will slow down on purchases.
Corn futures for March delivery fell 6.75 cents, or 1 percent, to $6.445 a bushel in Chicago. The price declined 2 percent this week.
Soybeans for March delivery fell 1.5 cents, or 0.1 percent, to $13.98 a bushel. The most-active contract declined 1 percent this week.
Saturday, August 7, 2010
India Wheat Spoils on Lack of Warehouses
Crop storage has been a problem in India for some time, and this year its hitting hard, as wheat that could have fed up to 210 million people annually is beginning to rot because of lack of warehouses to put it in.
According to estimates by the Indian government, about 17.8 million metric tons of wheat is at risk, where it is stored outdoors under tarps, while the monsoon season begins to hit.
Unfortunately, the price of food and inflation has risen in the double digits for months, and to export the wheat to generate income which could be used in helpful ways, could result in large protests, and possibly riots.
So the grain continues to mount up rather than be used for some good. The only ones being helped by it at this time is the dogs ... literally.
The other hard place the government finds itself in is it is unable to buy wheat because it would increase the growing deficit in the country, as it would have to do it at subsidized prices.
But Biraj Patnaik, a key adviser to the Supreme Court of India, said, "The government is acting like the biggest hoarder. It's unconscionable and unacceptable."
"You're going to end up losing as much money on food grains that go bad than the subsidies would incur if they distributed it to the poor," he added. "It's completely irrational and illogical not to distribute it right away.
A growing number of people are pushing for the privatization of the market in order to increase investment in the sector and drive down prices, and create a better storage and supply channel.
According to estimates by the Indian government, about 17.8 million metric tons of wheat is at risk, where it is stored outdoors under tarps, while the monsoon season begins to hit.
Unfortunately, the price of food and inflation has risen in the double digits for months, and to export the wheat to generate income which could be used in helpful ways, could result in large protests, and possibly riots.
So the grain continues to mount up rather than be used for some good. The only ones being helped by it at this time is the dogs ... literally.
The other hard place the government finds itself in is it is unable to buy wheat because it would increase the growing deficit in the country, as it would have to do it at subsidized prices.
But Biraj Patnaik, a key adviser to the Supreme Court of India, said, "The government is acting like the biggest hoarder. It's unconscionable and unacceptable."
"You're going to end up losing as much money on food grains that go bad than the subsidies would incur if they distributed it to the poor," he added. "It's completely irrational and illogical not to distribute it right away.
A growing number of people are pushing for the privatization of the market in order to increase investment in the sector and drive down prices, and create a better storage and supply channel.
Friday, July 23, 2010
Wheat Futures: Which Direction?
Wheat futures have been riding high over the last four weeks, but that seems about to end, even though weather conditions in Canada and Russia continue to cause problems for the grain.
The challenge for wheat, as it has been for years, is the increasing amount of acreage around the world being dedicated to growing the grain.
With that in mind, the inevitable bad weather in various parts of the world, while having a temporary impact on wheat futures' prices, overall level off and bring them back down to where they belong.
Until there is a move toward planting less wheat, which is unlikely any time soon, this will remain the way things are.
Heading into August, wheat futures will drop down to about $5 a bushel, or even lower.
The challenge for wheat, as it has been for years, is the increasing amount of acreage around the world being dedicated to growing the grain.
With that in mind, the inevitable bad weather in various parts of the world, while having a temporary impact on wheat futures' prices, overall level off and bring them back down to where they belong.
Until there is a move toward planting less wheat, which is unlikely any time soon, this will remain the way things are.
Heading into August, wheat futures will drop down to about $5 a bushel, or even lower.
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