Wheat prices climb on weak crop conditions

AP News
Posted: Oct 26, 2010 3:46 PM
Wheat prices climb on weak crop conditions

Wheat prices rallied on news that the emerging crop is weak after a relatively dry fall, stoking concerns about a supply pinch down the road.

The wheat rally came after the U.S. Department of Agriculture released a new estimate late Monday showing that 50 percent of the emerging wheat crop is in fair or poor condition in the 18 states where a majority of wheat is grown.

Just 40 percent of the crop was estimated to be in good shape, according to the report.

The estimate cemented concerns that a lack of rain in the Midwest will lead to a less-than-average crop, said Analyst Jack Scoville of Price Futures Group.

"We knew there were strong concerns with the crop condition, but to have it show up in (in the USDA report) like that really gave everybody something on paper as a reason to buy," Scoville said.

Wheat for December delivery rose 18 cents to $6.92 a bushel. The rally spilled over to other grains contracts, with December corn adding 2.25 cents to $5.71 a bushel and January soybeans gaining 1 cents to $12.31 a bushel.

In other trading, gold fell slightly while all other metals settled higher on the day.

Gold for December delivery fell 30 cents to settle at $1,338.60 an ounce.

Silver gained 28.6 cents to $23.830 an ounce. In other metals contracts for December, copper rose 0.6 cents to $3.8690 a pound and palladium rose $16.65 to $625.45 an ounce. January platinum added $9 to settle at $1,702 an ounce.

Oil prices wavered as the dollar got a little stronger and stocks wavered after disappointing earnings reports and lower home prices. Slight gains by the dollar against the euro made crude priced in dollars more expensive for investors holding other currencies.

Benchmark crude for December delivery rose 3 cents to $82.55 a barrel.

In Nymex trading in November contracts, heating oil fell 0.5 cents to settle at $2.2500 a gallon and gasoline gained 1.67 cents to settle at $2.0940 a gallon. Natural gas gained 3.7 cents to settle at $3.354 per 1,000 cubic feet.