News
28.01.2010
Wheat Advances After Decline to 15-Week Low Attracts Buying
Wheat advanced from a 15-week low on speculation lower prices may have attracted investors. Corn and soybeans also gained.
Wheat for March delivery rose as much as 0.8 percent to $4.875 a bushel in after-hours electronic trading on the Chicago Board of Trade before trading at $4.8525 at 2:46 p.m. Singapore time. The contract yesterday touched $4.83, the lowest price for the most-active contract since Oct. 12.
Speculative long positions, or bets wheat prices will rise in Chicago, fell 3.9 percent to 73,416 contracts in the week ended Jan. 19 from a week earlier, according to the U.S. Commodity Futures Trading Commission data. Speculative net short positions rose 52 percent to 35,842 contracts in the week ended Jan. 19 from a week earlier, it said.
“It’s a very big fall in a short period of time,” Peter McGuire, managing director at CWA Global Markets Pty., said by phone from Sydney today. The decline in prices “may pause for a few hours but I don’t think it’s going to do much. The trend is still lower.”
Harvests of all grains worldwide will come to 1.77 billion metric tons in the year through June, higher than a November estimate of 1.76 billion tons, the International Grains Council said Jan. 21. The increase reflected higher wheat, corn and barley output in North America and countries of the former Soviet Union.
Wheat futures may fall to as low as $4.50 a bushel in Chicago in the first half of this year, as global supply rises, damping demand for U.S. exports, Luke Mathews, a commodity strategist at Commonwealth Bank said in a report published today.
Wheat prices may trade between $5 and $6 a bushel in the second half of 2010 after U.S. winter wheat plantings for 2010 harvest declined 14 percent to the lowest in 97 years, he wrote.
‘Bulls Squeezed’
“The global supply profile is very, very strong,” CWA’s McGuire said. “The bulls got squeezed and they’ve got to get out” which may extend declines in prices of wheat, corn and soybeans, he said.
Corn for March delivery added as much as 0.5 percent to $3.60 a bushel after yesterday dropping to $3.5825, the lowest price for the most-active contract since Oct. 7. The contract has lost 14 percent this year through yesterday and traded 0.4 percent higher at $3.5975 a bushel at 2:59 p.m. Singapore time.
Soybeans for March delivery added 0.4 percent to $9.3225 a bushel at 3 p.m. Singapore time. It earlier fell as much as 0.2 percent to $9.2675 a bushel, the lowest price for the most active contract since Oct. 8.
Soybeans declined as the dollar gained against a basket of six major currencies, making U.S. supplies less attractive to investors and importers.
The Dollar Index advanced for a third day, after Kansas City Fed President Thomas Hoenig said the time has come to change the promise to keep U.S. borrowing costs low and before a U.S. report forecast to show growth in the world’s biggest economy quickened.
“The dollar is advancing and that exacerbates the uncompetitiveness of U.S. exports,” McGuire said.
Bloomberg
