Wheat Jumps Most in Six Weeks as Dry Kansas Weather Curbs Yield (Update 1)
By Tony C. Dreibus – May 15, 2012 5:44 PM GMT+0100
Wheat rose the most in more than six weeks on speculation that dry weather will curb yields in Kansas, the biggest U.S. producer of winter varieties.
About 52 percent of the Kansas crop was rated good or excellent as of May 13, down from 60 percent the prior week, the U.S. Department of Agriculture said in a report yesterday. Most of the state has received little or no rain in the past week, National Weather Service data show. Before today, the price dropped 5.8 percent this year as favorable weather sped crop development.
“We’re getting anecdotal evidence from central Kansas west that the crop” potential is declining, Mike Zuzolo, the president of Global Commodity Analytics & Consulting in Lafayette, Indiana, said in a telephone interview. “The drop in the good-to-excellent conditions support that anecdotal evidence that we’re losing yield in Kansas.”
Wheat futures for July delivery advanced 2.6 percent to $6.1375 a bushel at 11:43 a.m. on the Chicago Board of Trade, heading for the biggest jump since March 30.
Dry weather in parts of Russia and Ukraine also will boost prices, Zuzolo said. Some rain may fall in parts of east Ukraine and the North Caucasus of Russia with little expected elsewhere in the next seven days, forecaster Telvent DTN said in a report today.
“There’s a revival in Russia with their potential yield because of dryness as well,” Zuzolo said. “So the two major wheat belts in the Northern Hemisphere are cutting yields coming into the harvest.”
Wheat is the fourth-largest U.S. crop, valued at $14.4 billion in 2011, behind corn, soybeans and hay, government data show.