Wheat up on rise in demand, acreage cut
Wheat production this season is expected to be one million tonne higher than forecast
By Bloomberg | Updated:
By Isis Almeida
PARIS: Wheat rose for a second day in Paris and Chicago as earlier declines spurred nations such as Jordan and Saudi Arabia to issue import tenders at a time that the area planted in the US is set to shrink.
Iraq is also seeking to buy the grain, while Egypt, the largest wheat importer, recorded its biggest purchase in almost a year on Thursday. Wheat prices falling for a fourth year on the Euronext and Chicago Board of Trade are boosting demand, with Tunisia and Algeria issuing tenders to buy the durum variety this week.
Wheat production in the 2015-16 season that began in July will be 1 million metric tonne higher than previously forecast, the International Grains Council said on Thursday. That’s helping drive prices lower and will result in US farmers planting the smallest acreage with the grain in 46 years, Commerzbank said in a report e-mailed on Friday, citing the US Department of Agriculture’s first forecasts for next season.
The market is “getting some demand to help price action,” Matt Ammerman, a commodity risk manager at futures and options brokerage INTL FCStone, said on Friday. The USDA acreage estimates are “showing the trend right now for farmers”.
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US farmers will plant 51 million acres (21 million hectares) of wheat this year, down 6.6% on last year and less than the 52.4 million acres analysts had estimated.
The drop to the lowest in almost half a century is due to weak prices.
PARIS: Wheat rose for a second day in Paris and Chicago as earlier declines spurred nations such as Jordan and Saudi Arabia to issue import tenders at a time that the area planted in the US is set to shrink.
Iraq is also seeking to buy the grain, while Egypt, the largest wheat importer, recorded its biggest purchase in almost a year on Thursday. Wheat prices falling for a fourth year on the Euronext and Chicago Board of Trade are boosting demand, with Tunisia and Algeria issuing tenders to buy the durum variety this week.
Wheat production in the 2015-16 season that began in July will be 1 million metric tonne higher than previously forecast, the International Grains Council said on Thursday. That’s helping drive prices lower and will result in US farmers planting the smallest acreage with the grain in 46 years, Commerzbank said in a report e-mailed on Friday, citing the US Department of Agriculture’s first forecasts for next season.
The market is “getting some demand to help price action,” Matt Ammerman, a commodity risk manager at futures and options brokerage INTL FCStone, said on Friday. The USDA acreage estimates are “showing the trend right now for farmers”.
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Milling wheat for May delivery gained 0.3% to 154 euros ($170) a metric tonne on the Euronext exchange in Paris. On the Chicago Board of Trade, futures for the same month rose 0.3% to $4.5525 a bushel. Both rose for a second day. Egypt’s state-run buyer, the General Authority for Supply Commodities, bought 300,000 tonnes of wheat in a tender Thursday, the largest purchase since April 18, data compiled by Bloomberg showed. Saudi Arabia is seeking 770,000 tonnes in a tender closing on Saturday, while Jordan is seeking 100,000 tonnes on March 1and Iraq 50,000 tonnes on March 6. US farmers will plant 51 million acres (21 million hectares) of wheat this year, down 6.6% on last year and less than the 52.4 million acres analysts had estimated.
The drop to the lowest in almost half a century is due to weak prices.
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