Wheat prices surge as poor weather conditions cut into Russian, Canadian production forecasts

Wheat prices surge on global weather problems

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.

In the energy complex, oil prices edged lower after the government said crude inventories fell and refineries boosted production.

“At the end of the day, one thing that we’re seeing is a little larger than normal crude draw, but they’re simply turning it into products faster,” said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates.

Benchmark crude for August delivery fell 14 cents to settle at $77.45 a barrel on the New York Mercantile Exchange.

In other August energy contracts, heating oil fell 1.13 cents to settle at $2.0361 a gallon, gasoline lost 1.56 cents to $2.0665 a gallon and natural gas dropped 4.8 cents to $4.306 per 1,000 cubic feet.

Most metals edged lower.

Gold for August delivery lost $6.50 to settle at $1,207 an ounce.

In September contracts, copper fell .09 cent to settle at $3.0085 a pound; palladium lost $3.35 to $465.80 an ounce; and silver rose 3.3 cents to $18.290 an ounce.

October platinum fell $14.80 to settle at $1,520.60 an ounce.