Friday, July 16, 2010

Wheat prices surge on global weather problems

By SANDY SHORE, AP Business Writer

Wheat prices neared a six-month high Thursday as poor weather conditions continue to impact crops in Russia, Kazakhstan and Canada.

Wheat for September delivery rose 9.75 cents to settle at $5.59 a bushel Thursday after rising to $5.64 a bushel earlier in the day. The price is about $1 a bushel more than it was June 29 and at the highest level since reaching $5.7050 a bushel during trading on Jan. 12.

The rally has been triggered by lower expectations in key wheat-producing regions while the U.S. crop is forecast in good-to-excellent condition.

A severe drought is expected to cut Russia's wheat production by at least 14 percent from last year's harvest and Kazakhstan's production by about 18 percent, according to the U.S. Agriculture Department's July figures.

Rainy weather has hurt the growing season in Canada, where the wheat planting forecast is about 19 percent less than a year ago, the U.S. agency said.

"Any reduced exports out of Russia could very much help U.S. wheat exports," said Richard Feltes, MF Global's director of commodity research.

Corn for September delivery benefited from the rally in wheat prices, rising 9 cents to $3.8425 a bushel. August soybeans gained 2.5 cents to $9.9750 a bushel.

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