Wheat Advances as Price Slump, Dollar Drop Attracts Importers

By Jae Hur

Feb. 3 (Bloomberg) -- Wheat climbed for a third day on speculation that last month’s slump and the dollar’s decline will increase demand from importers. Soybeans declined.

Wheat for March delivery gained as much as 0.8 percent to $4.9125 a bushel on the Chicago Board of Trade. The grain tumbled 12 percent last month, the biggest monthly drop since June 2009, on slack demand for U.S. supplies amid increasing global inventories. The dollar has lost 0.6 percent against a basket of six major currencies since Jan. 29.

“The U.S. dollar pullback is behind the bounce,” said Toby Hassall, an analyst with CWA Global Markets Pty in Sydney. “In my view the fundamentals remain soft, particularly wheat and soybeans.”

Wheat has rallied 3.7 percent from $4.7150 a bushel on Jan. 29, the lowest level in more than three months, and was at $4.8875 at 3:33 p.m. Tokyo time after trading as low as $4.8575. The price jumped 2.6 percent yesterday, the most since Jan. 4.

Global output in the year that ends May 31 will total 676.1 million metric tons, after a record crop of 682.7 million tons the previous year, the U.S. Department of Agriculture said in a Jan. 12 report. Stockpiles were forecast by the USDA to expand 19 percent to 195.6 million tons.

Japan will hold a tender tomorrow to buy 85,000 tons of milling wheat, including 65,000 tons of U.S. grain. Morocco is seeking to buy 103,000 tons of U.S. wheat in a tender that closes Feb. 16, the country’s grain-buying office said Feb. 2.

Corn Tender

South Korea’s Nonghyup Feed Inc. issued a tender to buy as much as 165,000 tons of corn for arrival between April and July, according to a copy of the company’s tender notice. The company also sought 55,000 tons of feed wheat for July delivery in the tender today.

Soybeans for March delivery slipped 0.2 percent to $9.24 a bushel while corn was little changed at $3.66 a bushel.

Corn and soybeans gained 1.7 percent yesterday, the most since Dec. 28, as equities and crude oil jumped, signaling more demand for fuel and livestock feed made from the crops.

Crude oil was little changed at $77.18 a barrel after gaining 3.8 percent yesterday, the biggest gain since Sept. 30. The Dollar Index was at 78.956 as of 3:40 p.m. Tokyo time, little changed from yesterday, when it fell 0.3 percent.

Asian stocks advanced as much as 1 percent, lifting the MSCI Asia Pacific Index for a second day, after the Standard & Poor’s 500 Index added 1.3 percent yesterday as U.S. pending home sales increased 1 percent in December after a 16 percent drop in November, the National Association of Realtors said. Compared with a year earlier, pending sales climbed 11 percent.

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