The following article is from Bloomberg:
By Jae Hur
December 06, 2010, 10:15 PM EST
Wheat advanced to a four-month high in Chicago as Australia cut its export forecast after heavy rains delayed the harvest and reduced grain quality.
Wheat for March delivery increased for a fifth day, gaining as much as 2.1 percent to $8.095 a bushel, the highest level for a most-active contract since Aug. 6, before trading at $8.04 at 10:50 a.m. Singapore time.
Australian output may be 26.8 million metric tons in the 2010-2011 season, compared with a September prediction of 25.1 million tons, the Australian Bureau of Agricultural & Resource Economics & Sciences forecast today in a report. Exports may be 16 million tons, compared with the previous estimate of 18.4 million tons.
“Less supply from Australia may increase demand for the U.S. crop,” Toshimitsu Kawanabe, an analyst at Tokyo-based commodity broker Central Shoji Co., said today.
Prices have jumped 68 percent since the end of June as drought sapped Russian supplies, floods harmed fields in Canada, and dry weather in the U.S. Great Plains eroded the prospects for winter crops. The U.S. is forecast to be the largest wheat exporter in the 2010-2011 season, followed by the European Union, Canada and Australia, according to the U.S. Department of Agriculture.
Lower shipments from Australia may drive wheat prices higher as the USDA forecast a 22.9 million-ton shortfall in global output this season, the first deficit in three years.
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