Wheat prices surge on improving global demand

AP News
Posted: Mar 15, 2012 6:39 PM
Wheat prices surge on improving global demand

Wheat prices surged 3.3 percent Thursday on signs that demand is improving from other countries and businesses that add the grain to products, among other uses.

The growing interest in U.S. wheat comes as questions linger about inventories. Global stockpiles are ample but may have been eroded by winter damage to crops in Europe. There also is speculation that farmers may plant other crops this spring in hopes of earning more profits.

Wheat for May delivery increased 21 cents to finish at $6.6475 per bushel. Corn rose 10.25 cents to end at $6.69 per bushel and soybeans ended up 18.75 cents at $13.69 per bushel.

Wheat sales and shipments to domestic businesses have been solid. In addition, the U.S. Agriculture Department said wheat export sales were recorded last week to Spain, Iran, the Philippines and Thailand.

Traders are hopeful that demand for exports will increase because U.S. wheat remains the cheapest in the world. "In addition, production in the coming year looks lower in many countries as farmers switch to more profitable crops," Jack Scoville, vice president of Price Futures Group, stated in a research report.

Corn and soybean prices also rose. Global supplies are expected to remain tight this year after crops were damaged by a drought in South America. Yields from Brazil's soybean crop continue to be disappointing, Telvent DTN analyst John Sanow said.

In other trading, sugar prices jumped 4.3 percent on speculation that Europe may be considering some "pretty significant" imports, which surprised traders because supplies are adequate, said Spencer Patton, founder of the hedge fund Steel Vine Investments LLC. Sugar for April delivery increased 1.1 cents to 25.5 cents per pound. The price is up nearly 10 percent this year.

Industrial metals rose after surveys by the Federal Reserve Banks in Philadelphia and New York showed manufacturing in the Northeast expanded in March. That provided more proof of the strengthening U.S. economy.

Copper for May delivery increased 4.95 cents to end at $3.8975 per pound, April platinum rose $8.60 to $1,683.90 per ounce and June palladium ended up $12.45 at $709.90 per ounce.

April gold increased $16.60 to finish at $1,659.50 per ounce while May silver rose 54.5 cents to $32.726 an ounce.

Oil prices fell after the White House said reports that the United States and Britain had agreed to release oil from government-controlled emergency reserves were inaccurate.

Benchmark crude dropped 32 cents to finish at $105.11 per barrel on the New York Mercantile Exchange. Heating oil fell 4 cents to $3.22 per gallon, gasoline futures decreased 6 cents to $3.29 per gallon and natural gas ended down 1 cent at $2.28 per 1,000 cubic feet.