Wheat prices climb on hope for strong demand

AP News
Posted: May 07, 2012 4:17 PM
Wheat prices climb on hope for strong demand

Wheat prices rose Monday as investors speculated that export demand may improve as farmers prepare to harvest this year's crop.

Wheat for July delivery rose 2.5 cents to finish at $6.12 per bushel.

The U.S. crop is on track to produce a bountiful harvest this year. Other regions, including eastern Europe, also have had good production, which means global supplies are plentiful.

Some investors are speculating that overseas buyers may become more interested in the U.S. wheat because the price remains one of the cheapest in the world compared with other regions, Northstar Commodity analyst Jason Ward said.

"It looks like a wonderful crop," he said. "It's cheap in the world's eyes."

In other July agricultural contracts, July corn fell 0.25 cent to finish at $6.20 per bushel and soybeans dropped 12.5 cents to $14.6575 per bushel.

Other commodities were mostly lower as investors waited to see how Europe will cope with its economic problems after weekend elections in France and Europe raised questions about the future of plans to curb government spending and contain the region's debt crisis.

In Greece, voters shifted support away from two main parties that backed recent austerity measures to extremist parties. That left the financially troubled country without clear leadership. French Socialist Francois Hollande defeated Nicolas Sarkozy for president. Sarkozy has been one of the key leaders of the region's response to the crisis.

"There's a lot of talk, a lot of anti-austerity talk, that type of stuff, that's got people pretty rattled," Kingsview Financial analyst Matt Zeman said. "The market is just going to be vulnerable to news coming out of there for the time being."

Gold for June delivery fell $6.10 to finish at $1,639.10 per ounce and May silver declined 30.8 cents to $30.072 an ounce. May copper rose 5.35 cents to $3.7775 per pound, July platinum dropped $5.90 to $1,530.10 an ounce and June palladium fell $4.35 to $647.80 an ounce.

Oil prices fell to the lowest level of the year on the unsettled European situation. Benchmark oil fell 55 cents to finish at $97.94 per barrel on the New York Mercantile Exchange. Earlier Monday, it dropped to $95.34 per barrel, which was 10 cents below its recent low set on Feb. 2.

Heating oil decreased 2.74 cents to end at $2.9814 per gallon, gasoline futures fell 0.17 cent to $2.9741 per gallon and natural gas rose 5.7 cents to $2.336 per 1,000 cubic feet.