Wheat Advances from 11-Week Low as U.S. Crop Conditions Worsen

By Jae Hur

March 3 (Bloomberg) -- Wheat rebounded from an 11-week low after a government report showed the U.S. winter wheat crop deteriorated last month in Kansas, Oklahoma and Texas because of a lingering dry spell.

About 50 percent of plants in Kansas were rated good or excellent at the end of February, down from 59 percent at the end of January, the Department of Agriculture said yesterday in a report. About 23 percent of the Oklahoma crop got the top ratings, down from 24 percent, and the Texas crop was rated 10 percent good or excellent, down from 12 percent, the USDA said.

“Prices should derive a degree of support from the extremely poor condition of the U.S. winter wheat crop,” Toby Hassall, an analyst with Commodity Warrants Australia in Sydney, said by e-mail today.

May-delivery wheat gained as much as 0.8 percent to $5.10 a bushel in electronic trading on the Chicago Board of Trade and was at $5.095 at 10:39 a.m. Singapore time. The contract lost 3 percent yesterday after touching $5.0275, the lowest for a most- active contract since Dec. 12. Futures are down 62 percent from a record $13.495 a year earlier.

Grain and oilseed prices in Chicago dropped yesterday as tumbling global equities signaled a deepening recession. The Dow Jones Industrial Average fell below 7,000 for the first time since 1997. The Reuters/Jefferies CRB Index of 19 raw materials fell 5.3 percent.

Dollar Gains

“Until we see an equity market rebound it is unlikely that Chicago grains and oilseed prices will see much upside,” Hassall said. “There are no signs that the weak demand outlook is improving. Furthermore, the collapse in equities is driving an appreciation of the dollar which hurts dollar-denominated commodity prices.”

Corn for May delivery rose 0.2 percent to $3.51 a bushel at 10:43 a.m. Singapore time after declining 2.4 percent yesterday. Futures have fallen 56 percent from a record $7.9925 on June 27.

Soybeans for May delivery rose 0.5 percent to $8.48 a bushel after declining 3.2 percent yesterday. The price is down 48 percent from a record $16.3675 on July 3.

Crude oil for April delivery rose 0.2 percent to $40.22 a barrel after dropping 10 percent yesterday. The dollar was at $1.2597 per euro as of 10:20 a.m. in Singapore from $1.2578 late yesterday in New York.

To contact the reporter on this story: Jae Hur in Singapore at jhur1@bloomberg.net