Wednesday, August 17, 2022

Wheat Rises to Highest Since 2008

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The following article is from Bloomberg Businessweek:

By Whitney McFerron

Wheat prices extended a rally to the highest since 2008 on signs that political tension in the Middle East and North Africa is spurring governments to boost grain imports, while drought threatens the crop in China.

Egypt, the world’s largest importer, agreed to buy 170,000 metric tons on Feb. 11, including 55,000 from the U.S. Iraq is buying wheat from the U.S. and Australia, Reuters reported. Prices in China, the world’s largest consumer and producer, jumped to a record after the government said snow failed to ease dry conditions.

“Unrest in the Middle East is probably causing some stockpiling,” said Mike Zuzolo, the president of Global Commodity Analytics & Consulting in Lafayette, Indiana. The market “is able to hang on there nicely, given the Egypt tender and expectations for more tenders from the Middle East in the next day or two.”

Wheat futures for March delivery rose 8.25 cents, or 0.9 percent, to $9.07 a bushel at 12:20 p.m. on the Chicago Board of Trade. Earlier, the price reached $9.1675, the highest for a most-active contract since August 2008. Before today, the grain surged 77 percent in the past year after drought slashed Russian production and floods damaged crops in Australia and Canada.

Shrinking global supplies spurred a 26 percent jump in U.S. wheat exports in 2010, compared with 2009, and shipments to Egypt more than doubled, the USDA said today.

Protests have spread to countries including Yemen and Bahrain after Egypt’s Hosni Mubarak resigned as president following more than two weeks of unrest.

China Snow

In China, most of the snow fell south of the main wheat areas last week, Gail Martell, an agricultural meteorologist at Whitefish Bay, Wisconsin-based Martell Crop Projections, said in a report. The southwestern part of Shandong, a major growing province, got 0.2 inch of precipitation since Oct. 1, compared with 3.5 inches normally, Martell said.

“China wheat is at an important turning point,” she said.

As of Feb. 10, the drought affected 6.75 million hectares (16.7 million acres) of crops, leaving 2.8 million people and more than 2.5 million livestock short of drinking water, the state-run Xinhua News Agency said.

Wheat was the fourth most-valuable U.S. crop in 2009 at $10.6 billion, behind corn, soybeans and hay, government data show.

 

–Editors: Patrick McKiernan, Daniel Enoch

To contact the reporter on this story: Whitney McFerron in Chicago at wmcferron1@bloomberg.net.

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net.

 

Source:  Bloomberg Businessweek

Posted by Haylie Shipp

 

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