Chicago wheat strengthens on mounting worries over crop quality

07:44, December 03, 2010      

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Chicago Wheat futures continued to rise on Thursday as insurance buying of U.S. wheat surfaced, indicating mounting concerns over reducing supplies of high quality wheat worldwide. Corn futures reversed gains on fund- selling. Soybean ended a tad lower after hitting 2-week high on strong demand for U.S. soybean.

The most active corn contract for March delivery trimmed 10.75 cents, or 1.9 percent, to 5.555 dollars per bushel. March wheat futures climbed 8.5 cents, or 1.1 percent, at 7.485 dollars a bushel. January soybean pared 3.25 cents, or 0.3 percent, to 12. 7975 dollars per bushel.

Traders mentioned that wheat continued to be supported by the persistent dryness in the U.S. hard red wheat belt, along with the poor harvest weather in Australia, which may deteriorate half of its wheat crop to feed quality. A trader pointed out that importers worried about the reducing supplies of exportable wheat in 2011 scrambled to overbook U.S. wheat. "We had miserable growing conditions in key world exporting countries. The world needs a great growing year ahead to replenish stocks with high protein wheat suitable for human consumption as the world sits on near record inventories of low quality feed only suitable wheat," Tim Hannagan, a senior grains analyst at PFGBEST said Thursday.

U.S. Department of Agriculture announced Thursday that last week's export sale for corn reached 758,100 tons, which is within the range of trade expectation. Last week's export sale for soybean totaled 1.342 million tons, which nearly doubles the previous week, with China the biggest buyer. Net weekly export sales for wheat came in at 704,200 tons, which is near trade expectation.

Meanwhile, USDA also announced that U.S. private exporters sold 238,000 tons of U.S. corn to an unknown destination for delivery in the 2010/11 marketing year. And Japan bought 135,128 tons of U. S. corn for the delivery in 2011/12 marketing year.

Source: Xinhua


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