Wheat hits multi-year highs on strong global demand signals

CHICAGO / LONDON (November 1): Wheat starts November with a bang, with futures hitting multi-year highs as major importers source grain.

Chicago’s benchmark contract hit an 8.5-year high on Monday, while futures on hard red and spring varieties hit levels not seen since 2014 and 2008 respectively.

An increase in demand is chasing limited global supplies after bad weather hit crops in major exporting countries this year. This has spurred the longest streak of monthly wheat gains since 2007. Some growers are also grappling with dry weather at planting time, as well as soaring fertilizer costs that could hurt next year’s crops.

The Saudi Arabian state buyer reserved 1.3 million tonnes of wheat in a bidding process last weekend, nearly double the expected amount. In addition, Egypt’s largest importer returns to the market with a tender on Monday, less than a week after its biggest purchase of the season.

Paris miller wheat futures prices approach an all-time high, while Minneapolis spring wheat used in bagels and pizza crusts rose 2.6% to US $ 10.7925 per bushel, highest since April 2008.

Chicago’s benchmark soft red winter wheat, used by bakers to make cookies and cakes, climbed 3% to US $ 7.9575, the most expensive since January 22, 2013. Wheat hard winter red used for all-purpose flour has reached the highest level. level since May 2014, or $ 8.0475 in Chicago.

The prospect of lingering supply problems next year increases the chances that wheat prices will continue to soar and worsen global food inflation. The latest figures from the United Nations show that food prices are peaking in a decade, amid declining harvests and supply chain disruptions.

Supply problems, driven by soaring global fertilizer prices, also boosted corn futures prices. The most active contract rose for a fifth straight session in Chicago to US $ 5.7875, the highest since mid-August.

Soy has fluctuated between gains and losses. The United States is expecting its biggest harvest on record this year, and the prospect of large plantings next year is likely, as some farmers are expected to pull out some corn acreage in favor of beans that are less dependent on fertilizer.

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