2014.10.0202:38:43UTC+00Wheat rises again on crop quality outlook

Wheat gained for the second consecutive day behind concerns that dry weather could end up negatively affecting yields in Australia.

Futures for wheat with a delivery date in December increased to a price per bushel as high as $4.8175 after gaining 0.6%. It was trading late morning Singapore time at $4.8125 on the Chicago Board of Trade. The commodity fell to the lowest among most active contracts since June 20th on September 25th when it hit $4.6625.

Wheat has declined by 21% so far this year due to market expectations of global output reaching a record high. The US Department of Agriculture (USDA) predicted on September 11th that harvests around the world will reach the highest ever at 719.95 million metric tons. The fifth largest producer of the crop, Australia, revised down its outlook for this year’s crop due to dryness in certain planting regions. The amount of rainfall in some areas of South Australia, Victoria, and eastern New South Wales was below average during September, says the Bureau of Meteorology.

Commodity sales director Michael Pitts from Sydney’s National Australia Bank Ltd. says that, “Generally the market has got quite a bearish tone. It’s really only Australia that seems to be, on the supply side at least, the supportive factor.” Australia’s crop is forecast by the Australian Bureau of Agricultural and Resource Economics and Sciences to total 24.2 million tons during the 2014-2015 season.

Corn with a delivery date in December was slightly up with a price per bushel of $3.215 from yesterday’s $3.2125. Soybeans for November delivery increased by 0.3% to $9.19 per bushel after declining to the lowest among most active contracts since July 2010 yesterday at $9.04.