Wheat rose for the first time in four sessions as purchases by Algeria and Iraq signaled a recent drop in prices is boosting import demand amid concern freezing weather in parts of the U.S. may harm crops.
Algeria bought 500,000 metric tons of wheat for delivery in April and May, U.K. grain trader Gleadell Agriculture Ltd. said. Iraq agreed to buy 200,000 tons of Australian wheat, 100,000 tons of Canadian wheat and 50,000 tons of U.S. wheat, the country’s grain board said.
"The low level of current prices is arousing buying interest," Paris-based farm adviser Agritel wrote in a comment. "The markets seem to have found a short-term bottom."
Wheat for March delivery rose 1.8 percent to $5.715 a bushel on the Chicago Board of Trade by 7:25 a.m. Prices fell to $5.605 on Jan. 10, the lowest since July 2010, after the U.S. Department of Agriculture forecast record world output. Milling wheat for March delivery traded on NYSE Liffe in Paris added 1.3 percent to 195.50 euros ($266.51) a ton.
Temperatures in the U.S. Midwest are expected to remain below zero degrees Fahrenheit (minus 18 degrees Celsius) in the next 10 days, with 15 percent of wheat in the region at risk of "minor" damage due to limited snow cover, Commodity Weather Group wrote in a report today.
"Low temperatures recorded in the U.S. are raising concerns about the Midwest and Illinois wheats, prompting operators to show caution and cover some short positions," Paris-based farm adviser Agritel wrote in a comment today.
Some spillover of subzero temperatures into the southern U.S. Plains may happen in the six-to-10 day period, DTN said yesterday. Parts of the Plains, including top winter-wheat grower Kansas, have no snow on the ground, National Weather Service data show.
"Freezing temperatures across the northern U.S. Plains and the upper Midwest are raising fears of winterkill," Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, wrote in a note today. "This may provide some support to prices."
Corn for March delivery gained 0.8 percent to $4.28 a bushel, advancing for a third day. Prices touched $4.0625 on Jan. 10, the lowest since August 2010. Soybeans for delivery in March rose 0.5 percent to $12.855 a bushel.