AgResource: “Panic Is Starting to Surface in World Wheat Market”
US WHEAT REVIEW: Soars On Firm Global Demand, Poor Weather
CHICAGO (Dow Jones)–U.S. wheat futures rallied Tuesday as global weather problems, including new floods in Australia, pushed buyers to accelerate their purchases.
Soft red winter wheat for March delivery closed up 20 cents, or 2.6%, at a nearly two-week high of $7.93 1/4 a bushel at the Chicago Board of Trade.
Algeria, one of several North African and Middle Eastern countries that have faced protests over rising food prices, sparked the latest rally by buying a massive 600,000 tons of optional-origin wheat, traders said. The purchase, for shipment between March and April, brings the country’s purchases this month to nearly one million tons.
Turkey also jumped into the market and bought 175,000 tons of U.S. hard red winter wheat, the U.S. government said Tuesday. Hard red winter wheat is a good-quality variety, usually used to make bread, that is grown in the central and southern U.S. Plains.
“You continue to hear about these various civil unrests concerning the tightness of food supplies in the world market,” said Shawn McCambridge, Chicago-based senior grains analyst at Prudential Bache, a brokerage firm. “That continues to keep the issue of tight commodities in front of the investment public.”
Importers scrambled to secure food wheat as floods expanded into the Australian state of Victoria from Queensland, where they had previously been focused, and disrupted the harvest and transportation of grain. Heavy rains have already lowered the quality of wheat grown in Australia, the world’s fourth-largest exporter of the grain, shifting demand to the U.S., the leading exporter.