June 28 (Bloomberg) -- Wheat futures surged the most in almost six weeks on concern that crops in the northern U.S. Great Plains are deteriorating after excessive rainfall delayed planting and sapped nutrients from the soil.
About 69 percent of spring-wheat crops were in good or excellent condition as of June 26, down from 72 percent a week earlier, the U.S. Department of Agriculture said yesterday. Parts of North Dakota and Montana, the biggest domestic growers of the variety, have had triple the normal amount of rain in the past two months, National Weather Service data show.
“The crop-condition ratings gave us enough of a bullish reason to stop the bleeding,” after futures fell in the past four weeks, said Louise Gartner, the owner of Spectrum Commodities in Beavercreek, Ohio. “From what I’m hearing from farmers, there’s a lot of ponding going on because it’s so wet, and a lot of fertilizer has been leached out of the soil.”
Wheat futures for September delivery rose 21 cents, or 3.2 percent, to settle at $6.7175 a bushel at 1:15 p.m. on the Chicago Board of Trade, the biggest gain for a most-active contract since May 18. The gain was the first in five sessions. Prices are down 14 percent this month on concern that commodity demand will shrink as Greece’s debt crisis threatens to slow global economic growth.
The drop in wheat prices may spur demand from livestock producers contending with high costs of corn for feed, Gartner said. July-delivery wheat was 42.75 cents cheaper than July corn today on the CBOT. Demand also may increase for milling-grade wheat in the southern and central Plains, as excess moisture in the north threatens to erode crop quality, Gartner said.
“There’s great demand for wheat for the feed channels, and high-quality milling wheat,” Gartner said. “The high-protein wheat coming out of Kansas should be meeting up with a lot of demand.”
Wheat is the fourth-largest U.S. crop, valued at $13 billion in 2010, behind corn, soybeans and hay, government data show.
--Editors: Daniel Enoch, Steve Stroth.
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