Isaac bears down, China buys up: Wheat price jumps

AP News
Posted: Aug 29, 2012 4:13 PM
Isaac bears down, China buys up: Wheat price jumps

The price of wheat jumped Wednesday, pushed higher by demand from China and Russia and worries over weather.

Wheat for December delivery climbed 3.5 percent, rising 30.25 cents to $9.0575 per bushel. Prices for corn and soybeans also rose.

The prices for all three crops have risen sharply since June. A severe drought has crippled crop yields in the U.S., depressing supply and thus sending prices up.

But many investors have already accounted for the drought, and Wednesday's price increase was fueled by other factors, too.

Traders expect that Russia could trim wheat exports after a year of poor production, Price Futures Group's Jack Scoville wrote in a note to clients. China is stockpiling wheat and soybeans, and Saudi Arabia is looking to buy wheat this week.

Hurricane Isaac is complicating the situation. Though rain could nourish crops in the Southeast, it's already too late to save much of the crop supply. The hurricane will also cut into harvesting this week.

Corn for December delivery rose 2.3 percent, up 18 cents to $8.135 per bushel. November soybeans were up 1.8 percent, climbing 30.75 cents to $17.53 per bushel.

Major metals closed lower for the day, though the changes were muted.

December gold fell $6.70 to $1,663 per ounce. December silver fell 4.1 cents to $30.922 per ounce.

September copper fell 2 cents to $3.4425 per pound. September palladium fell $4.85 to $634.85 per ounce. October platinum fell 10 cents to $1,520.30 per ounce.

The price of oil fell despite Isaac, which forced some oil rigs in the Gulf Coast to temporarily shut down. Investors seemed more swayed by the government's report that inventories of crude oil rose last week for the first time in a month. A bigger supply usually lowers prices.

Benchmark crude, which is used to price U.S. gas, fell 84 cents to $95.49 per barrel. Brent crude, which helps determine international prices, fell 4 cents to $112.54 per barrel.

In other energy trading, heating oil fell 0.46 cent to $3.1157 per gallon. Gasoline fell 2.58 cents to $3.1003 per gallon. Natural gas rose 2 cents to end at $2.6340 per 1,000 cubic feet.