Wheat Prices Keep Rising as Cold Weather Fuels Supply Concerns
**US Wheat Hits One-Week High**
US wheat prices rose to a one-week high on Thursday, April 4, extending gains from the previous day when the market posted its biggest rally in six months with colder-than-usual weather in the Northern hemisphere triggering concern over global supply, newswires reported.
In the last three trading sessions wheat has been on the rise, boosted by concerns of more damage to the winter crop while cold soil temperatures threaten to delay spring planting.
A leading scientist at the French National Institute for Agricultural Research said that a recent wave of cold weather across France, Europe’s largest wheat producer, could reduce grain crop yields by five to six percent if it lasts beyond mid-April. Meanwhile, US winter wheat condition ratings were off to their worst start in early April in 11 years due to insufficient soil moisture in the Plains region, Reuters noted. Bloomberg quoted agricultural meteorologist at DTN Bryce Anderson as saying that soil temperatures in parts of the Plains are well below the level needed to start spring planting. The US government said at the beginning of the week that winter-wheat crop conditions have improved little since November when they were the worst since record-keeping began in 1985.
After reaching a weekly peak of $6.98 a bushel Chicago Board of Trade (CBOT) wheat for May delivery steadied at $6.93 a bushel, as of 06:20 ET on April 4. This compares with the grain’s nine-month low of $6.59 a bushel touched on April 1.
**Corn Edges Up but Remains Under Pressure**
At the time wheat touched its weekly peak, CBOT corn for May delivery stabilised temporarily, rising 0.2 percent to $6.42 a bushel. Corn prices, which slid drastically earlier this week after the US said its stockpiles were larger than previously estimated, (Corn Set for Bear Market as US Stockpiles Exceed Estimates) is now also facing pressure from projections for higher output in South America.
!m[Corn Prices Remain Under Pressure](/uploads/story/1798/thumbs/pic1_inline.png)
In a note to clients, private analytics firm Informa Economics upgraded its forecasts for corn production in Brazil and Argentina. The company estimated Brazil’s 2012/13 corn crop, which is currently being harvested, at 71.95 million tonnes — up from the previously-estimated 71.6 million tonnes. The analytics firm pegged Argentina’s corn harvest at 25.3 million tonnes, above the earlier forecast of 25.0 million tonnes.
These forecasts affected the corn market later during the April 4 trading session. As of 07:23 ET, the CBOT corn price started falling again, losing 0.27 percent to $6.39 a bushel.
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