Bloomberg News

Wheat Advances as 16% Slump Lures Buyers, Canada’s Acreage Drops

June 22, 2011

June 22 (Bloomberg) -- Wheat futures gained for a second day on speculation three weeks of declines have attracted buyers amid concern that wet weather in Canada may cut acreage, curbing supply from the world’s fourth-largest shipper.

September delivery wheat gained as much as 0.8 percent to $7.11 a bushel on the Chicago Board of Trade, before trading at $7.1025 a bushel at 3:45 p.m. in Singapore. The contract slumped 16 percent in the first 20 days of this month.

Japan plans to purchase 103,252 metric tons of wheat from Canada and Australia in a regular tender on June 23, according to the Ministry of Agriculture, Forestry and Fisheries. The nation is the second-largest wheat buyer in Asia after Indonesia, according to the U.S. Department of Agriculture.

“The wheat complex is higher due to buying on dips,” said Ker Chung Yang, an analyst at Phillip Futures Pte., in a report e-mailed today. Prices also rose as sentiment spilled over from other markets, he said.

Asian stocks rose, driving the region’s key index up for a second day as Greek Prime Minister George Papandreou won a parliamentary confidence vote, moving the country a step closer to avoiding a default on its debt.

Grain planting in Canada is about 87 percent complete, and “little additional” acreage likely will be planted because the crop-insurance deadline across the prairies has lapsed, the Canadian Wheat Board said June 20.

Corn for December delivery rose as much as 0.7 percent to $6.85 a bushel in Chicago, before trading unchanged at $6.8025. Soybeans for November delivery slipped 0.2 percent to $13.465 a bushel.

--With assistance from Aya Takada in Tokyo. Whitney McFerron in Chicago, Wes Goodman in Singapore and Shani Raja in Sydney. Editors: Ovais Subhani, Jarrett Banks

To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net


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