Wheat futures rose for the third time in four sessions on signs that demand for U.S. supplies is increasing from Egypt, the world’s largest importer
U.S. exporters sold 120,000 metric tons to Egypt for delivery in the year ending May 31, the Department of Agriculture said today.
Global inventories on May 31 may be 12 percent smaller than a year earlier as production dropped following a drought in Russia and Eastern Europe and wet weather in Canada.
“The Egyptians are in for U.S. wheat for a dedicated amount of time, because they’ve essentially run out of other sources,” said Mike Zuzolo, the president of Global Commodity Analytics & Consulting in Lafayette, Indiana.
Wheat futures for March delivery rose 0.5 cent to settle at $6.845 a bushel at 1:15 p.m. on the Chicago Board of Trade. The commodity has climbed 3 percent in four sessions and is up 43 percent since the end of June.
Egypt was the 14th-largest importer of U.S. wheat in the year that ended May 31. As of Nov. 11, the country ranked third after Japan and Nigeria. The U.S. is the biggest exporter.
Earlier, prices fell as much as 0.8 percent on speculation that government data would show improved U.S. crop conditions. After markets closed, the USDA said 47 percent of the winter crop was rated good or excellent, up from 46 percent a week earlier.
“The reports we’re getting are that crop conditions are good, and not really supportive of higher prices,” said Larry Young, the president of Covenant Trading LLC in Chicago.
Crops improved in the Midwest, where some areas had as much as 1.5 inches (3.8 centimeters) of rain in the past week, said Drew Lerner, the president of World Weather Inc. in Overland Park, Kansas.
Wheat is the fourth-biggest U.S. crop, valued at $10.6 billion in 2009, behind corn, soybeans and hay, government data show.
