Wheat surged to the highest price since early February, heading for the biggest weekly increase in 21 months, on speculation that dry weather in the U.S. and the Black Sea region will hurt crops and limit production.
Little or no rain has fallen during the past 30 days in parts of Kansas, the biggest U.S. producer, National Weather Service data show. Russia’s grain crop will total 91 million metric tons this year, 2.7 percent less than forecast in April, because of dry weather, the country’s Institute for Agricultural Markets, known as Ikar, said today.
“In Russia and Ukraine, there’s a smaller crop,” Jamey Kohake, a broker at Paragon Investments in Silver Lake, Kansas, said by telephone. In Kansas, “the crop is not near as good as it was two weeks ago,” with yield losses of 20 percent to 30 percent, he said. “There’s been no rain, and just heat and wind.”
Wheat futures for July delivery gained 3.2 percent to $6.785 a bushel at 10:05 a.m. on the Chicago Board of Trade, after reaching $6.80, the highest since Feb. 1. The price has gained 14 percent this week, heading for the biggest weekly gain since August 2010.
Wheat is the fourth-largest U.S. crop, valued at $14.4 billion in 2011, behind corn, soybeans and hay, government data show.
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