Wheat prices climb as dry spell hits Kansas crop

AP News
Posted: May 15, 2012 4:04 PM
Wheat prices climb as dry spell hits Kansas crop

Wheat prices rose Tuesday as crop condition in parts of Kansas deteriorated due to dry weather.

There has been a lack of significant rain recently in many of the wheat growing regions of Kansas, where the crop is about three weeks ahead of normal because of a mild spring.

The U.S. Agriculture Department said Monday that 52 percent of the Kansas crop was in good-to-excellent condition as of Sunday. That compared with 60 percent in that range on May 6.

In addition, farmers in the Ukraine and other wheat-growing regions of the former Soviet Union have been battling dry conditions this spring, said Mike Zuzolo, president of Global Commodity Analytics & Consulting LLC.

Zuzolo said the price of corn benefited from speculation that it may become more in demand if wheat prices continue to climb.

Wheat for July delivery rose 10.25 cents to finish at $6.085 per bushel. July corn increased 14.25 cents to $5.9725 per bushel and soybeans ended up 26 cents at $14.13 per bushel.

Other commodities were mixed as worries about what may be next for Greece overshadowed some positive U.S. economic news.

Greek leaders failed to reach an agreement to build a coalition government, setting the stage for another election next month. The leaders are at odds over austerity measures required for the financially troubled country to receive bailout funding from others in the European Union.

In the U.S., a trade group said that confidence among home builders rose to the highest level in five years in May.

Kingsview Financial analyst Matt Zeman said that investors remained focused on Greece. "The risk appetite remains very, very iffy right now," he said. "Until that's kind of sorted out ... you may see a lot of this real chop and slop."

Gold for June delivery fell $3.90 to finish at $1,557.10 per ounce, May silver dropped 26.5 cents to $28.054 per ounce and May copper declined 3.5 cents to $3.522 per pound. July platinum rose $3.90 to $1,446.50 per ounce and June palladium ended up $6.25 at $601.10 per ounce.

Benchmark oil declined 80 cents to end at $93.98 per barrel on the New York Mercantile Exchange. Heating oil rose 0.35 cent to $2.933 per gallon, gasoline futures fell 1.49 cents to $2.9441 per gallon and natural gas rose 6.9 cents to $2.50 per 1,000 cubic feet.